Minsheng Securities·2024-07-21 13:29Summary of BYD (002594.SZ) Conference Call Company Overview - Company: BYD (002594.SZ) - Industry: Automotive, specifically focusing on new energy vehicles (NEVs) Key Points and Arguments Growth Drivers - Multiple Growth Strategies: BYD is focusing on scaling, high-end positioning, globalization, and smart technology as its core growth drivers. The combination of new energy and exports is identified as the main growth engine for passenger vehicles [2][21][22]. - Market Segmentation: The company is leveraging cost advantages in the sub-200,000 RMB market while accelerating its presence in the above-200,000 RMB market due to the loss of joint venture premiums [2]. Global Expansion - Overseas Manufacturing: BYD has announced plans to build factories in five countries, with a total planned annual production capacity exceeding 1 million vehicles. Factories in Uzbekistan and Thailand are already operational, with Brazil expected to start production in H2 2024 [2][42]. - Self-built Shipping Fleet: The establishment of a self-owned shipping fleet is aimed at reducing transportation costs and ensuring rapid delivery to overseas markets [2]. - Sales Channel Strategy: The company is adopting a localized dealer cooperation strategy to expand its sales network effectively [2][19]. Market Potential - Projected Global Market Share: BYD anticipates a future global market share of 4.918 million vehicles, with significant focus on Southeast Asia, South America, Oceania, Central Asia, and Western Europe [2][22]. - Regional Insights: - Southeast Asia: Expected to be the largest market with a projected share of 12.5% (1.625 million vehicles) [2]. - South America: Rapid growth anticipated, especially with the Brazil factory coming online [2]. - Oceania: Notable potential due to zero tariffs in Australia [2]. - Central Asia: Strong performance in Israel, with the Uzbekistan factory already operational [2]. - Western Europe: Facing trade friction but expected to expand with localized production [2]. Financial Projections - Revenue and Profit Forecast: Projected revenues for 2024-2026 are 833.6 billion, 1 trillion, and 1.16 trillion RMB respectively, with net profits of 39.81 billion, 51.18 billion, and 63.61 billion RMB [3][2]. - Valuation Metrics: The projected PE ratios for 2024-2026 are 18, 14, and 12 respectively, maintaining a "recommended" rating [2][3]. Risks - Market Risks: Potential risks include a downturn in the automotive market, lower-than-expected sales, intensified competition, and challenges in overseas expansion [2]. Additional Important Insights - Sales Performance: In 2023, BYD achieved wholesale sales of 3.013 million NEVs, marking a 61.8% year-on-year increase, solidifying its position as a leader in both the Chinese and global NEV markets [23][24]. - Export Growth: The company’s export volume has surged, with a 334.2% increase in 2023, indicating strong international demand for its vehicles [24][26]. - Product Portfolio: The Yuan PLUS model is highlighted as a key export vehicle, with significant sales growth in various international markets [35][36]. This summary encapsulates the strategic direction, market opportunities, financial outlook, and potential risks associated with BYD's operations and expansion plans in the new energy vehicle sector.