BYD: Consensus is clearly exceeded – ambitious goals

In the first half of the year, BYD’s sales fell 2 percent to CNY 58.03 billion. The consensus stood at CNY 51.43 billion. Earnings per share rose from CNY 0.49 to CNY 0.56. The consensus here was CNY 0.35. It has been going very well recently, especially for medical breathing masks, but the automotive sector has weakened somewhat due to the current situation.

There should be a new dynamic in the third quarter, which should also affect the automotive sector. After three quarters there should therefore be earnings per share of CNY 1.03 to CNY 1.10.

The analysts at DZ Bank consider this to be ambitious. For 2020 they expect earnings per share of CNY 0.82 (old: CNY 0.75). In the coming year, the plus should be 1.17 CNY (old: 1.10 CNY).

The analysts continue to give a sell recommendation for BYD shares. The price target is increased from CNY 65.00 to CNY 68.00.

The subsidy policy in China should give the auto business a boost in the second half of the year. There will also be new models. It remains unclear to the analysts how sales outside the home market will develop.

The analysts see the stock’s valuation in a sector comparison high. The 2020e P / E ratio is 82.5. GM comes in at 17.0, Geely has a P / E of 18.7. In the coming year, the PER will be 58.0, 4.7 and 8.6 respectively.

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