Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Bernstein SocGen Group has reduced its price target on BYD (SZ:002594) Co Ltd (HK:1211) (OTC:BYDDF) to HK$133.00 from HK$145.00 while maintaining an Outperform rating on the Chinese electric vehicle maker.
The firm cited lower sales volumes and margin assumptions for the domestic market as key factors behind the price target reduction. For the Shanghai-listed shares (002594.CH), Bernstein SocGen adjusted its target to RMB122.00 from RMB390.00, or RMB130.00 when adjusted for share dividend.
Despite domestic market pressures, the research firm highlighted BYD’s strong overseas electric vehicle performance as an offsetting factor. Bernstein SocGen also noted robust battery sales to key clients including XPeng (NYSE:XPEV) and Xiaomi (OTC:XIACF) as positive developments. InvestingPro data shows Xiaomi has achieved remarkable growth with a 204% return over the past year and maintains a strong financial health score of "GREAT."
The price target revision is based on rolled-forward sum-of-the-parts assumptions, corresponding to 18 times one-year forward price-to-earnings ratio. BYD remains one of Bernstein SocGen’s top Outperform picks alongside Xiaomi.
Bernstein SocGen expressed optimism about Xiaomi’s long-term electric vehicle potential following its YU7 launch, despite near-term capacity limitations, and viewed positively its IoT expansion both in China and internationally.
In other recent news, Xiaomi has begun mass production of its self-developed Xring O1 mobile chip, which will be featured in the upcoming Xiaomi 15S Pro smartphone and the Xiaomi Pad 7 Ultra. This development was shared by the company’s founder, Lei Jun, on his Weibo (NASDAQ:WB) account. Xiaomi is preparing for a product launch event for these devices. Additionally, Xiaomi announced plans to invest $6.93 billion in chip design over the next decade, starting in 2025. This substantial investment was also revealed by Lei Jun, emphasizing the company’s commitment to advancing its chip technology. Furthermore, Xiaomi is set to unveil the Xring O1 chip in late May, marking a significant step as the company joins a select group of smartphone manufacturers developing their own chips. The introduction of the Xring O1 is anticipated to enhance the performance of Xiaomi’s products. These developments reflect Xiaomi’s strategic focus on innovation in the technology sector.
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