\u3000\u3000 Byd Company Limited(002594) (002594)
The track slope is long and the snow is thick, and the company takes the lead. New energy vehicles are in a period of rapid development, and the growth space of the industry is fully opened. According to our calculation, from 2020 to 2030, the compound annual growth rate of new energy vehicles in the three major markets of China, the United States and Europe will reach 22.5% / 36.7 / 19.7% respectively. The market has entered the product era, which is characterized by the king of products. The rapid development of the industry comes from the same frequency resonance of supply drive with technology R & D as the core and demand pull with user experience as the core. In the field of new energy vehicles, the company has worked deeply for many years. At present, it has established a full engine and full power product system of traditional fuel, hybrid and pure electric vehicles. Referring to our judgment on the typical characteristics required by the ultimate winner of intelligent electric vehicles, we believe that Byd Company Limited(002594) has the potential to grow into a “great company” and the conditions to become the final winner.
Enrich the product matrix and develop intelligent electric. In terms of technical route, the company’s pure electric and hybrid two wheel drive, and pure electric launched E3 0 platform, hybrid launched two sets of DM-I and dm-p systems, with leading technology and strong product power; In terms of brand network, the company’s Ocean network and Dynasty network go hand in hand, the model cycle is upward, and the market share is steadily increasing; In terms of market positioning, the company will deeply cultivate the mass market below 200000 yuan, expand the medium and high-end market above 200000 yuan through hot selling models, and launch high-end brands above 500000 yuan to further open the price ceiling; In terms of intelligence, on the one hand, the company developed its own intelligent driving product dipilot and intelligent cockpit product dilink. On the other hand, it cooperated with Baidu, Alibaba, Iflytek Co.Ltd(002230) and other Internet enterprises to jointly establish an intelligent driving company with momenta, with a clear strategic plan.
We will deeply distribute industries and deepen foreign cooperation. The company’s in-depth layout and vertical integration of the new energy vehicle industry chain, from upstream raw materials to midstream parts and then to downstream vehicles, forming a complete closed loop, with significant industrial chain synergy; Establish five Freddy subsidiaries: Freddy battery, Freddy power, Freddy vision, Freddy technology and Freddy mould (Freddy Seiko), further accelerate the external supply business of new energy core parts and broaden the growth space; Cooperate with external companies such as Faurecia, Huawei, Toyota, FAW, horizon and momenta to comprehensively expand and deepen cooperation in intelligent electric and continuously improve the company’s industrial competitiveness; The semiconductor business is about to be split and listed, with a valuation of more than 10 billion. Based on Byd Company Limited(002594) vehicles, it is expected to usher in high-speed development under the dual resonance of the rapid penetration of intelligent electric vehicles and the domestic substitution of vehicle specification chips.
Investment suggestion: the company has deeply arranged the new energy vehicle industry chain with advanced technology, perfect brand and rich products. With the rapid development of the industry, its sales will enter the fast lane of rapid growth; Thanks to the development of 5g and the development of major customers in North America, the company’s mobile phone business will maintain steady development; The company’s secondary rechargeable battery business benefits from the recovery of consumer electronics. In addition, the external supply of blade batteries will form the company’s second growth curve. We estimate that from 2021 to 2023, the operating revenue of Byd Company Limited(002594) will be RMB 1945 / 3269 / 429.6 billion respectively, the net profit attributable to the parent company will be RMB 36.0/96.6/14.65 billion respectively, and the corresponding EPS will be RMB 1.26/3.38/5.12/share. Using segment valuation, based on segment revenue in 2022, the corresponding market value is RMB 1337.6 billion, which is covered for the first time, and given a “buy” rating. The target price in 2022 is RMB 459.
Risk tips: there is a downside risk in the prosperity of the automotive industry, the penetration rate of new energy vehicles is lower than expected, the competition in the automotive industry is intensified, the new business expansion is lower than expected, the calculation is subjective, there is a risk of deviation, and the risk of selecting comparable companies across the market
