Citigroup: BYD Co. Ltd.'s wholesale volume in May exceeded expectations, initiating a 30-day positive catalyst observation period.

Citibank released a research report stating that BYD's wholesale volume in May reached 383,000 vehicles, an increase of 19.4% month-on-month and 0.3% year-on-year, exceeding market expectations, mainly supported by strong export sales reaching 161,000 vehicles. The bank predicts that BYD's second-quarter profit performance will be strong, the revenue structure will be updated, and future weekly orders will be even stronger, thus initiating a 30-day positive catalyst observation. Citibank forecasts that if BYD's wholesale volume remains flat in June, and retail sales in May and June increase by 3% and 8% respectively, the expected net profit for the second quarter will reach 10.3-12.4 billion RMB, higher than the market consensus of 8-9 billion RMB. Among them, the export business is expected to contribute 9.8 billion RMB in net profit; domestic and energy storage system business is expected to generate 0.75-4 billion RMB in net profit. In addition, if the growth of export sales is combined with domestic structural improvements, it will significantly increase the profit visibility of BYD electric vehicles in the second quarter and the second half of the year.