CMSC International: Maintains "Buy" Rating on BYD COMPANY (01211); Overseas Sales Expected to Continue High Growth

CMSC International has released a research report maintaining an "Overweight" rating for BYD COMPANY (01211) with a target price of HKD 130. The company's monthly exports are currently around 180,000 to 190,000 vehicles, and management expects overseas sales to grow by 80% to 90% year-over-year by 2026, with projections exceeding 2.5 million units in 2027. Despite this year's sales being constrained by inadequate capacity, good growth has been maintained across regions, and as capacity improves and more high-end models are launched, overseas sales are expected to continue high growth. The bank estimates that after excluding currency exchange impacts in the first half of the year, the per-vehicle profit in overseas business exceeded RMB 20,000; currency exchange disturbances in the third quarter are expected to weaken. Alongside an increase in the proportion of high-end vehicles and the gradual maturation of overseas channels and production capacity, the potential for further improvement in per-vehicle profit is anticipated. The company aims to establish 20,000 fast-charging stations by 2026, adding another 30,000 by 2027, with a long-term plan exceeding 90,000 stations. The current core bottleneck is in fast-charging battery capacity, which is expected to be largely resolved by the end of 2026 to January or February of 2027, when all domestic pure electric models will be equipped with fast charging. There is currently strong demand for fast-charging models, with many orders still outstanding. As battery capacity ramps up, the company expects domestic monthly sales to increase by approximately 20,000 vehicles in the second half of the year. The bank noted that in the second quarter of 2026, high-end brand growth outpaced the Dynasty and Ocean series, and demand for fast-charging models remained resilient post-price increase, driving improvements in average per-vehicle price and profitability quarter-on-quarter. With an increase in the proportion of high-end models and a rise in fast-charging model output, domestic per-vehicle profitability in the third and fourth quarters is expected to show steady improvement, and third-quarter sales are also expected to grow further compared to the second quarter. Factories overseas, such as in Hungary, are still in the initial production phase, with low capacity utilization and production efficiency; as capacity ramps up and operations mature, it is anticipated that per-vehicle logistics costs can be reduced by over RMB 10,000 and customs duties in Europe by around RMB 40,000 to 50,000, with overseas business expected to shift from scale growth to simultaneous increases in volume and profit.