Wang Chuanfu's New Year Address: BYD to Accelerate Global Growth and Establish a Premier Chinese Brand

Citi Research has placed BYD COMPANY on a 90-day upside catalyst watch due to several key factors. Firstly, the firm's FY2026 net profit is expected to have a significantly reduced correlation with domestic NEV (New Energy Vehicle) sales, decreasing from over 50% in the past to potentially just 13%. This suggests a diversification in revenue sources, which could stabilize profits. Additionally, Citi believes that market expectations for BYD's domestic NEV business performance have reached a low point, indicating potential for recovery. With the introduction of a new model cycle in China in 1Q26, the risk-reward scenario from ongoing de-stocking is seen as favorable. Consequently, Citi has rated BYD COMPANY as a "Buy" and set a target price of $174, making it their top pick in the sector.

The analyst rating from Goldman Sachs for BYD COMPANY is based on several key factors: 1. Long-term Overseas Expansion: The management's confidence in achieving overseas sales of 1.5 million units by 2026 is seen as a significant driver for profit growth. 2. Market Growth Potential: Goldman Sachs expects overseas markets to be the primary growth driver for the company over the next decade, with projected overseas sales (excluding the US) reaching between 1.5 to 3.5 million units from 2026 to 2035. 3. Earnings Growth Forecast: The broker anticipates a compound annual growth rate (CAGR) for earnings of 30% from 2025 to 2028, indicating strong financial performance. 4. Increasing Profit Contribution from Overseas: The forecasted increase in overseas profit contribution from 21% in 2024 to 60% in 2028 suggests a significant shift in the company's revenue sources. 5. Product Competitiveness: The expected increase in NEV (New Energy Vehicle) penetration and BYD's competitive product offerings are likely to enhance its market share. These factors collectively support Goldman Sachs' "Buy" rating and target prices of $141 for H-shares and RMB 144 for A-shares.

The analyst rating for BYD COMPANY (01211.HK) is maintained as a Buy by DBS Research, despite a trimmed target price from HKD150 to HKD140. The reasoning behind this rating includes the company's rapid expansion into overseas markets to counteract narrowing margins in the domestic market, with overseas sales growing significantly by 134% year-over-year. The expectation that the proportion of exports will increase substantially in the coming years further supports the positive outlook. Additionally, the analyst suggests that while short-term volatility in share price may occur, investors should consider buying on dips, as scale and cost efficiency are anticipated to improve following the initial investment phase of new product launches and international expansion.

The analyst rating from Goldman Sachs is based on the expectation that overseas markets will become a significant growth engine for BYD COMPANY over the next decade. They have raised their sales forecast for the carmaker's overseas markets outside the US by 5-14%, anticipating sales of 1.5-3.5 million cars by 2026-2035. The report highlights that BYD's electric vehicle penetration in key overseas markets is currently lagging behind China by about four years, but it is expected to catch up by 2028, leading to a projected market size of 28 million cars by 2035. This positive outlook has led Goldman Sachs to raise its target price for BYD COMPANY by 8% to HKD141, maintaining a Buy rating.