Citi Research opened a 90-day positive catalyst watch on Chinese automaker BYD (SZ:002594) (OTC:BYDDY) and expects the company's 2Q23E NP to reach RMB 5 - 5.7 billion (RMB 1 = $0.183) showing a quarter-on-quarter (QoQ) growth of 25-30%.
Additionally, the estimated net profit per vehicle for the second quarter of 2023 is expected to be RMB 7.5-8k, which is an improvement from the RMB 7-7.5k recorded in the first quarter of 2023. Analysts anticipate a monthly improvement in delivery going forward and a continued acceleration in exports for BYD.
Citi Research maintained BYD as a sector top pick as analysts wrote in a note, “We expect 24E-26E BYD total earnings and sales can still grow at above 20% CAGR with the support from export growth, and sequential ROIC expansion due to revenue mix upgrade from faster mid-high end car sales, which means the stock is trading below 1x 2024 PEG (23E PER 24.3x, 24E 16.2x) with attractive valuation risk-reward with the near-term catalysts.”