Citibank: Maintaining BYD's (01211) “Buy” rating target price of HK$142 ultra-fast charging ecosystem is expected to be a new source of revenue

The Zhitong Finance App learned that Citibank released a research report saying that BYD's (01211) ultra-fast charging ecosystem will become an additional source of revenue. The gross margin is expected to reach 63% and 59% in 2027 and 2030, respectively, and the net interest rate will reach 20% and 12% respectively. By 2030, it can contribute about RMB 21.6 billion in net profit, and the revenue is expected to reach RMB 177.9 billion. Citi gave BYD H Shares a “buy” rating, with a target price of HK$142.

According to the bank, based on a price-earnings ratio of 8 times 2030 and discounted to 2027 at a 12% weighted average capital cost, the ecosystem is valued at RMB 123 billion, equivalent to 15.7 yuan per share, accounting for about 17% of BYD's current A+H market value.

The bank also expects that every 1% increase in BYD's NEV market share will reduce its R&D and depreciation and amortization costs per vehicle by 2.6%, and increase the net profit per vehicle by 881 yuan, which is equivalent to an additional net profit increase of about 5.3 billion yuan in 2027.

Furthermore, the bank expects that the layout of intelligent connected new energy vehicles in the national “15th Five-Year Plan” will promote industry integration, which will benefit leading car companies to reduce operating leverage and costs. Market concentration in domestic fuel vehicles, pure electric, plug-in hybrid and extended range segments has increased, and a fierce price war is no longer a reasonable strategy.