Jefferies maintained a Buy rating on BYD (BYDDY, Financials) and raised its price target to HK$447 ($57.09) following the automaker's preliminary first-quarter earnings showing a year-over-year increase in profit of 86% to 119%, reaching between 8.5 billion and 10 billion renminbi ($1.17 billion to $1.37 billion).
The earnings growth was driven by higher sales of new energy vehicles, lower supply chain costs, and an increase in export volumes. BYD sold 1 million new energy vehicles in the first quarter of 2025, up 60% from a year earlier. Exports rose 111% to 206,000 units, accounting for 21% of total sales, compared with 16% in the first quarter of 2024 and 8% in the fourth quarter of 2024.
Jefferies analyst Johnson Wan said the company's performance aligns with its estimates and reflects stable operational execution. BYD's net profit per vehicle increased to between 8,000 and 9,400 renminbi ($1,100 to $1,200), up from 6,600 renminbi ($906) a year earlier.
Sales under the BYD brand reached 950,000 units, a 61% increase from a year earlier, led by models including Han, Song, Qin, Yuan, Seal, and Seagull. Denza sold 33,000 units, a 37% increase, while the FCB brand sold 19,000 units, up 74%.
The company's gross margin stood at 19.1% for the first quarter and its price-to-earnings ratio is 23.7, with a price-to-earnings growth ratio of 0.63.
Jefferies said areas to watch for the second quarter include inventory management of older models, tracking new order trends following April 2025 price cuts, customer feedback on BYD's smart driving models, new launches from Denza and FCB, the resilience of export growth amid global tariffs, and cost updates from overseas manufacturing.
In a separate note, analysts at Bernstein led by Eunice Lee maintained their Outperform rating on BYD with a lower price target of HK$350 ($44.70), citing its cost structure and research and development capabilities. Bernstein projects BYD will sell 5.1 million vehicles in 2025 and 5.7 million in 2026. It also forecast earnings per share of 13.61 renminbi ($1.87) in 2024, 17.85 renminbi ($2.45) in 2025, and 20.32 renminbi ($2.79) in 2026.
