BYDDY - BYD May Continue Cutting Prices Profitability And Growth Prospects Still Excellent

2024-05-05 09:00:00 ET

Summary

• BYDDF remains a Buy, due to its ability to scale its production capacity and to reduce its ASPs, while reporting growing profit margins on a YoY basis.
• Its focus on hybrids and full EVs is highly strategic as well, since it allows the automaker to tap into the ebb and flow of automotive trends.
• BYDDF's recent launches of electric pick-up trucks, supercar and off-road models further underscore the management's growing global ambitions to premiumize its branding and offerings.
• If anything, it already introduced the affordable $20.99K EV in Mexico by early 2024, with its cheapest EV, Seagull, retailing for $9.7K in China.
• As a result of its robust long-term investment thesis, we believe that BYDDF remains a Buy at every dips, especially since the automaker has offered a promising FY2024 delivery target of 3.6M vehicles.

We previously covered BYD Company Limited (BYDDF) in January 2024, discussing how it had performed against Tesla ( TSLA ) in FY2023, with the Chinese based automaker emerging as the king of EVs based on the FQ4'23 production/ sales number.

The management had also demonstrated why it might be able to maintain its competitive edge, thanks to its expanding footprint in Latin America, the EU, and Asia....

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