| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 106.70 | 9 |
| Intrinsic value (DCF) | 3616.24 | 3599 |
| Graham-Dodd Method | 29.80 | -70 |
| Graham Formula | 180.90 | 85 |
BYD Company Limited is a Chinese multinational technology company and one of the world's leading manufacturers of new energy vehicles (NEVs) and rechargeable batteries. Founded in 1995 and headquartered in Shenzhen, BYD operates across three core segments: Automobiles and Related Products, Rechargeable Batteries and Photovoltaic Products, and Mobile Handset Components. The company has evolved from a battery manufacturer to a comprehensive clean energy solution provider, offering a diverse portfolio including battery-electric and hybrid passenger vehicles, commercial vehicles, lithium-ion batteries, solar products, and rail transit equipment. BYD's vertically integrated business model spans from raw materials to finished vehicles, giving it significant cost advantages in the rapidly growing electric vehicle market. As China's largest electric vehicle manufacturer and a global leader in NEV sales, BYD plays a crucial role in the global transition to sustainable transportation and renewable energy solutions, positioning itself at the forefront of the automotive industry's electrification revolution.
BYD presents a compelling investment opportunity as the global leader in new energy vehicle sales with strong competitive advantages from its vertically integrated business model. The company's dominant position in the world's largest EV market, combined with its technological expertise in battery manufacturing and expanding international presence, provides significant growth potential. However, investors should consider risks including intense competition in the EV space, potential regulatory changes in China and overseas markets, and the capital-intensive nature of automotive manufacturing. The company's strong financial position with HKD 102.7 billion in cash, reasonable debt levels, and positive operating cash flow of HKD 133.5 billion provide financial stability, while its beta of 0.322 suggests lower volatility compared to the broader market.
BYD's competitive advantage stems from its unique vertically integrated business model that spans battery production, semiconductor manufacturing, and vehicle assembly. This integration allows BYD to control costs throughout the supply chain, particularly crucial for battery-electric vehicles where battery costs represent a significant portion of total vehicle cost. The company's expertise in battery technology, dating back to its origins as a battery manufacturer, provides a technological edge in energy density, safety, and production efficiency. BYD's Blade Battery technology offers superior safety characteristics compared to conventional lithium-ion batteries. The company's broad product portfolio across passenger vehicles, commercial vehicles, and energy storage systems creates cross-selling opportunities and diversification benefits. BYD's strong domestic market presence in China, the world's largest EV market, provides scale advantages and first-mover benefits in infrastructure development. However, the company faces challenges in brand perception outside China, where it must compete with established premium brands, and in technological innovation pace compared to some pure-play EV manufacturers focusing exclusively on automotive technology.