BYDDY - BYD: Why I Believe It's The Lowest-Risk EV Play

2024-03-27 22:04:28 ET

Summary

• BYD missed earnings estimates, but still reported record annual profits. as well as 80%+ Y/Y earnings growth.
• BYD's exports continue to grow rapidly, potentially offering the company a hedge against slowing EV demand in its domestic market.
• BYD's valuation and profitability set it apart from other companies in the EV sector, but it faces intense price competition in the Chinese market.

BYD Global ( BYDDF ) submitted its earnings sheet for the fourth-quarter earlier this week and although the Shenzhen-based car brand missed earnings expectations, it once again proved that it is one of the most profitable EV makers in the world. The company also overtook Tesla ( TSLA ) in the fourth-quarter in terms of BEV sales and is one of the few Chinese electric vehicle companies that is already widely profitable... which helps set BYD apart from start-up EV companies. While EV demand seems to be slowing down globally -- and a number of EV companies have either warned of slowing growth or reduced their delivery forecasts -- I believe BYD is the lowest-risk bet that investors can make in the Chinese electric-vehicle market. The company's valuation is also very attractive from a valuation point of view and the risk profile is favorable as well!...

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