BYD (002594) tracking report: market expectations are low

BYD (002594) tracking report: market expectations are low

BYD’s initial growth rate is far weaker in the industry and the broader market. We believe that the market has fully responded to the company’s performance and combined additional policy policies to take into account the landing of the boots. It is expected that the company’s quarterly report performance will grow rapidly.It is hoped to build a new brand of new energy vehicles with independent brands, and to re-evaluate the value of external supply of power batteries, and continue to recommend it.

Why is it worth attention at this time?

Year-to-date, the cumulative growth rate of BYD A / H is 13% /-2%, far lower than the CSI 300 (+ 26%) and the CITIC Auto Index (+ 21%).

However, the company’s new energy vehicle sales continued to grow at a high rate. In January 2019 and February, sales increased by + 291% and + 73%, respectively, forming a sharp contrast.

The market has fully responded to the company’s reduction of interests, mainly reflected in: 1) the impact of compensation tax rebates on sales and profits; 2) the impact of price reductions for Tesla models; 3) the external supply of power batteries is slow.

In this report, we will focus on the above three issues in order to explore the company’s investment opportunities.

What is the impact of supplemental backslopes?

New energy vehicle subsidies have accelerated their decline, and they are expected to withdraw in 2021. The post-subsidy industry will meet the challenges by reducing costs, increasing terminal prices, and upgrading vehicle models.

As of now, the new energy vehicle subsidy policy for 2019 has not yet been released. The market generally expects that the compensation decline in 2019 may be more than 50%. It is expected that it will impact the profitability of the entire industry in a short time.Vehicle planning products are launched, and it is estimated that new energy passenger vehicle sales in 2019 will exceed at least 1.4 million units.

BYD’s models have a strong cycle and achieve product competitiveness. At the same time, its battery capacity has begun to be released, and its cost advantage is obvious. Its market share will continue to show an upward trend.

How big is Tesla’s influence?

Recently, the price of Tesla’s entire aircraft has been reduced, and domestic plant construction has accelerated.

In the short term, Tesla’s price cuts for all models, especially the launch of the Model 3, will directly affect BBA (Benz, BMW, Audi), Weilai and other brands with a value of around 400,000.The impact of segment models is small, but it will drive the market’杭州夜网论坛s awareness and attention of electric vehicles.

In the medium and long term, after Tesla’s localization, the main force range of independent brand new energy vehicles will be around 15 million. With higher requirements for cost control, BYD is the most promising company to build independent brand explosive new energy vehicles.One.

What will happen to the external supply of power batteries?

We judge that in the future, the battery supply of mainstream global car companies will tend to be supplied at multiple points, and the rapid conversion of conversion battery technology will also transform power batteries into standard products.

Based on the judgment of industry trends, we believe that BYD’s battery supply will be an inevitable trend.

At present, the company’s power battery has entered Dongfeng’s supporting 佛山桑拿网 facilities and established a joint venture with Changan. The foreign supply has made substantial progress. It is expected that if it can enter the supply chain of mainstream domestic and foreign automobile companies in the future, it will be expected to bring a significant revaluation of the company’s value.

Risk factors: The company’s new energy vehicle production and sales are less than expected; changes in new energy vehicle policies; cloud rail advancement is less than expected.

Earnings forecast and estimation: Considering the compensation policy has not been officially announced, we temporarily maintain the EPS forecast for 2019/201.


01 yuan, the current price of 55 A shares.

39 yuan, corresponding to 34/28 times PE in 2019/20; the price of H shares is 49.

14 construction, corresponding to 31/24 times PE in 19/20.

The company’s new electric model is accelerated to launch and usher in a new model cycle.

Although the short-term profit is affected by the withdrawal of industry subsidies, in the medium and long term, the company can only achieve the technology reserve and product strength to continuously increase its market share, enjoy the industry growth dividend, continue to recommend and maintain the company (A + H shares) “Buy” rating.