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<Research>BOCI Downgrades BYD COMPANY's Rating to Sell w/ TP Cut to HKD80
Recommend 8 Positive 22 Negative 9 |
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BYD COMPANY (01211.HK)'s 2Q25 revenue grew by 14% YoY, roughly in line with expectations, but its net profit missed market expectations with a YoY slump of 29.9% to RMB6.36 billion, also its first YoY decline since 2022, BOCI wrote in its research report. If excluding BYDE, BYD COMPANY's GPM would have decreased by 2 ppts YoY or 5.1 ppts QoQ to 18.7%, below expectations. Meanwhile, as its operating expenses (especially R&D costs) remained high, its 2Q25 earnings per vehicle sank by over 40% YoY and QoQ to RMB4,900, compared to RMB8,739 in 1Q25. Its core earnings per vehicle for 2Q25 are estimated to be RMB2,556, down by 62.9% YoY or 57.4% QoQ. BOCI believes BYD COMPANY has entered a phase of slowing profitability after three years of rapid growth. In light of its still-high valuation and the market's continuous reduction of its earnings forecasts, the broker expects its stock to face downgrades down the road. BYD COMPANY's rating was downgraded from Hold to Sell, and its target price was cut from HKD121.67 to HKD80. AAStocks Financial News |
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