UBS released a research report stating that it reiterated the “buy” rating of BYD shares (01211), with a target price of HK$360. Investors are concerned about issues such as price wars, dealer inventories, and competition with Huawei, but based on high-end, export contribution, cost optimization, and raw material price reduction, the bank sees potential profit margins for the company;
According to the report, as of October, the inventory level of BYD dealers was about 1.8 months. Based on the peak winter season, the bank believes this level is reasonable and manageable. In terms of discounts, based on falling lithium prices, BYD's year-to-date cost per vehicle has dropped by 15,000 to 20,000 yuan, and the discount margin is also relatively moderate compared to its peers. In terms of competition, the bank believes that BYD's annual scale of 3 million vehicles, combined with vertical supply chain integration and system integration capabilities, is sufficient to overcome recent competition.