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BYD Company Limited: Difference between revisions

Page Discussion
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=== DCF ===
=== DCF ===
{| class="wikitable"
{| class="wikitable"
|$ million  
!$ million  
|
!
|
!
|
!
|
!
|
!
|Projected
!Projected
|
!
|
!
|
!
|
!
|-
|-
|Income Statement  
!Income Statement  
|2016
!2016
|2017
!2017
|2018
!2018
|2019
!2019
|2020
!2020
|2021
!2021
|2022
!2022
|2023
!2023
|2024
!2024
|2025
!2025
|-
|-
|Revenue  
|'''Revenue'''
|100,207,703
|100,207,703
|102,650,614
|102,650,614
Line 139: Line 139:
|267,750,386
|267,750,386
|-
|-
|% growth
|'''% growth'''
|
|
|2.44%
|2.44%
Line 163: Line 163:
|
|
|-
|-
|Gross profit
|'''EBIT'''
|19,018,263
|17,935,074
|18,066,764
|18,075,993
|27,243,591
|
|
|
|
|
|-
|Selling and General Expenses
| -4,196,339
| -4,925,288
| -4,729,481
| -4,345,897
| -5,055,613
|
|
|
|
|
|-
|Administration expenses
| -3,690,339
| -3,047,734
| -3,826,379
| -4,232,316
| -4,395,630
|
|
|
|
|
|-
|R&D
| -3,171,694
| -3,739,491
| -4,989,360
| -5,629,372
| -7,464,861
|
|
|
|
|
|-
|Other expenses
| -629,203
| -463,645
| -568,610
| -213,536
| -2,056,691
|
|
|
|
|
|-
|D&A
|7,027,569
|7,092,495
|9,426,520
|9,840,129
|12,518,675
|
|
|
|
|
|-
|EBITDA
|7,330,688
|5,758,916
|3,952,934
|3,654,872
|8,270,796
|
|
|
|
|
|-
|
|
|
|
|
|
|
|
|
|
|
|-
|EBIT
|14,358,257
|14,358,257
|12,851,411
|12,851,411
Line 271: Line 175:
|37,450,527
|37,450,527
|-
|-
|% sales
|'''% sales'''
|14.33%
|14.33%
|12.52%
|12.52%
Line 295: Line 199:
|
|
|-
|-
|Taxes
|'''Taxes'''
| -1,088,398
| -1,088,398
| -703,705
| -703,705
Line 307: Line 211:
| -666852.09
| -666852.09
|-
|-
|% EBIT
|'''% EBIT'''
| -7.58%
| -7.58%
| -5.48%
| -5.48%
Line 320: Line 224:
|}
|}
{| class="wikitable"
{| class="wikitable"
|Cash Flow items
! colspan="11" |Cash Flow items
|
|
|
|
|
|
|
|
|
|
|-
|-
|D&A
|'''D&A'''
|7,027,569
|7,027,569
|7,092,495
|7,092,495
Line 344: Line 238:
|18,039,113
|18,039,113
|-
|-
|% of sales
|'''% of sales'''
|7.01%
|7.01%
|6.91%
|6.91%
Line 356: Line 250:
|7.58%
|7.58%
|-
|-
|% of Capex
|'''% of Capex'''
|56.75%
|56.75%
|49.98%
|49.98%
Line 380: Line 274:
|0
|0
|-
|-
|Capex
|'''Capex'''
|12,384,399
|12,384,399
|14,191,948
|14,191,948
Line 392: Line 286:
|23,253,666
|23,253,666
|-
|-
|% of sales
|'''% of sales'''
|12.36%
|12.36%
|13.83%
|13.83%
Line 416: Line 310:
|
|
|-
|-
|Net working capital
|'''Changes in NWC'''
|11,831,007
| -2,175,906
| -1,209,481
| -1,062,342
|5,174,414
|
|0
|0
|0
|0
|-
|Changes in NWC
|
|
| -14,006,913
| -14,006,913
Line 440: Line 322:
|5,589,731
|5,589,731
|-
|-
|% of sales
|'''% of sales'''
|
|
| -13.65%
| -13.65%
Line 452: Line 334:
| -2.17%
| -2.17%
|-
|-
|% of change in sales
|'''% of change in sales'''
|
|
| -573.37%
| -573.37%
Line 465: Line 347:
|}
|}
{| class="wikitable"
{| class="wikitable"
|DCF
! colspan="12" |DCF
|
|
|
|
|
|
|
|
|
|
|
|-
|-
|Revenue
|'''Revenue'''
|100,207,703
|100,207,703
|102,650,614
|102,650,614
Line 491: Line 362:
|
|
|-
|-
|% growth
|'''% growth'''
|
|
|2.44%
|2.44%
Line 517: Line 388:
|
|
|-
|-
|EBIT
|'''EBIT'''
|14,358,257
|14,358,257
|12,851,411
|12,851,411
Line 530: Line 401:
|
|
|-
|-
|% margin
|'''% margin'''
|14.33%
|14.33%
|12.52%
|12.52%
Line 556: Line 427:
|
|
|-
|-
|Taxes
|'''Taxes'''
| -1,088,398
| -1,088,398
| -703,705
| -703,705
Line 569: Line 440:
|
|
|-
|-
|% of EBIT
|'''% of EBIT'''
| -7.58%
| -7.58%
| -5.48%
| -5.48%
Line 595: Line 466:
|
|
|-
|-
|EBIAT
|'''EBIAT'''
|13,269,859
|13,269,859
|12,147,706
|12,147,706
Line 621: Line 492:
|
|
|-
|-
|D&A
|'''D&A'''
|7,027,569
|7,027,569
|7,092,495
|7,092,495
Line 634: Line 505:
|
|
|-
|-
|% of sales
|'''% of sales'''
|7.01%
|7.01%
|6.91%
|6.91%
Line 660: Line 531:
|
|
|-
|-
|Capex
|'''Capex'''
|12,384,399
|12,384,399
|14,191,948
|14,191,948
Line 673: Line 544:
|
|
|-
|-
|% of slaes
|'''% of slaes'''
|12.36%
|12.36%
|13.83%
|13.83%
Line 699: Line 570:
|
|
|-
|-
|Current Assets
|'''Changes in NWC'''
|
|
|
|
|
|0
|0
|0
|0
|0
|
|-
|Current Liabilities
|
|
|
|
|
|6,101,620
|5,969,413
|5,840,070
|5,713,530
|5,589,731
|0
|-
|Net working capital
|11,831,007
| -2,175,906
| -1,209,481
| -1,062,342
|5,174,414
|
|
|
|
|
|
|-
|Changes in NWC
|
|
| -14,006,913
| -14,006,913
Line 751: Line 583:
|
|
|-
|-
|% of sales
|'''% of sales'''
|
|
| -13.65%
| -13.65%
Line 770: Line 602:
|
|
|
|
|0.52
|
|1.52
|
|2.52
|
|3.52
|
|4.52
|
|
|
|-
|-
|Unlevered FCF
|'''Unlevered FCF'''
|7,913,029
|7,913,029
|19,055,166
|19,055,166
Line 789: Line 621:
|25,979,391
|25,979,391
|TV
|TV
|}
'''WACC'''
{| class="wikitable"
!Risk free rate  (5 year US Bond)
|4.20%
|-
!Market risk premium
|5.00%
|-
!Levered beta
|0.64
|-
| colspan="2" |
|-
!Cost of equity
|7.40%
|-
!Cost of debt
|5.00%
|-
!Share price (as of 05/07/2023)
|67.94
|-
!Shares outstanding (latest reported)
|2861142855
|-
!Market capitalization
|1.94E+17
|-
!Internally calculated WACC
|7.400000%
|-
|-
!Terminal growth rate
|5.000%
|}
{| class="wikitable"
!Equity Value
|1182930437
|-
!Shares
|2861142855
|-
!Share Price RMB
|0.41
|-
!Current Share Price
|$                                67.94
|}
{| class="wikitable"
!
!
!
!
!
!WACC
!
!
!
|-
!
|
|
|
|6.00%
|
|6.50%
|
|7.00%
|
|7.40%
|
|8.00%
|
|8.50%
|
|9.00%
|
|-
|
!
|
|3.5%
|
|$                      0.39
|$                    0.33
|$            0.29
|$            0.26
|$            0.22
|$            0.20
|$            0.19
|-
!Terminal
|4.0%
|$                      0.49
|$                    0.39
|$            0.33
|$            0.29
|$            0.25
|$            0.23
|$            0.20
|-
!Growth
|4.5%
|$                      0.65
|$                    0.49
|$            0.40
|$            0.34
|$            0.29
|$            0.25
|$            0.23
|-
|-
|Year count
!Rate
|
|5.0%
|
|$                      0.97
|
|$                    0.65
|
|$            0.49
|
|$                     0.41
|0.56
|$            0.33
|1.56
|$            0.29
|2.56
|$            0.25
|3.56
|4.56
|
|-
|-
|Discount factor
!
|
|5.5%
|
|$                      1.93
|
|$                    0.97
|
|$            0.66
|
|$            0.52
|0.96
|$            0.40
|0.89
|$            0.33
|0.83
|$            0.29
|0.78
|0.72
|
|-
|-
|Present value of FCF
!
|
|6.0%
|
|#DIV/0!
|
|$                    1.94
|
|$            0.98
|
|$            0.70
|15105173.73
|$            0.50
|16082574.15
|$            0.40
|17014731.73
|$            0.34
|17907408.71
|18765855.76
|1136598585
|}
|}


=== Relative Valuation ===
=== Relative Valuation ===
{| class="wikitable"
!Company
!Market Cap
!P/S
!P/E
!EV/EBITDA
!EV/EBIT
|-
|'''Tesla'''
|823B
|9.6
|69.8
|47.5
|61.9
|-
|'''Toyota'''
|31T
|0.8
|12.7
|9.1
|15.9
|-
|'''Porsche'''
|101B
|1.8
|13.4
|6.9
|9.5
|-
|'''Mercedes Benz'''
|76.1B
|0.5
|5.1
|4.5
|6.1
|-
|'''Audi AG'''
|83.4B
|1.4
|11.3
|10.2
|10.2
|-
|'''Volkswagen'''
|73.7B
|0.3
|5.9
|2.7
|6.5
|-
|'''Ferrari'''
|70.2B
|13.2
|70.9
|38
|55
|-
|'''BMW'''
|69B
|0.5
|6.2
|3.9
|6.2
|-
|'''Daimler'''
|67.4B
|0.4
|3.7
|4
|5.4
|-
|'''Stellantis'''
|51.9B
|0.3
|3.4
|0.9
|1.2
|}


== References ==
== References ==
__INDEX__
__INDEX__

Revision as of 11:33, 22 July 2023

BYD Company
TypePublic
SEHK: 1211
SZSE: 002594
IndustryConglomerate
FoundedFebruary 1995; 29 years ago (1995-02)
FounderWang Chuanfu
Headquarters
Shenzhen, Guangdong
,
China
Area served
Worldwide
Key people
Wang Chuanfu (Chairman, CEO)
ProductsGasoline and electric cars, battery-powered bicycles, buses, trucks, forklifts, monorail train and buses, photovoltaic modules (solar panels), face masks, rechargeable batteries, and handset components.
RevenueIncrease RMB 424 billion (2022)[1]
Increase RMB 16.6 billion (2022)[2]
Total assetsIncrease RMB 295.78 billion (2021)[3]
Total equityIncrease RMB 104.24 billion (2021)[3]
Owner
Number of employees
Increase c.288,200 (2021)[3][10]
Subsidiaries
Websitewww.byd.com

BYD Company Limited, together with its subsidiaries, engages in the research, development, manufacture, and sale of automobiles and related products in the People's Republic of China and internationally. It operates through three segments: Rechargeable Batteries and Photovoltaic Products; Mobile Handset Components, Assembly Service and Other Products; and Automobiles and Related Products and Other Products. The company offers internal combustion, hybrid, and battery-electric passenger vehicles; buses, coaches, and taxis; logistics, construction, and sanitation vehicles; and vehicles for warehousing, port, airport, and mining operations. It also manufactures and sells lithium-ion and nickel batteries, photovoltaic products, and iron batteries primarily for mobile phones, electric tools, and other portable electronic instruments; mobile handset components, such as housings and electronic components; medical protection products; and automobiles, and auto-related molds and components, as well as provides assembly, and automobiles leasing and after sales services. In addition, it offers rail transit equipment; solar batteries and arrays; and urban rail transportation services. The company was founded in 1995 and is headquartered in Shenzhen, China.

The Idea

BYD Company Ltd. was founded by Wang Chuanfu, a chemist and government researcher, in 1995. The idea for the company came about when Wang Chuanfu identified the future potential of rechargeable batteries, a market which was then dominated by Japanese companies

Initially focusing on batteries for mobile phones and digital cameras, BYD's breakthrough came when it entered the rapidly growing automobile industry. Recognizing the environmental implications of traditional fuel vehicles, BYD made the strategic decision to delve into electric vehicles (EVs) and became a pioneer in this sector.

The company introduced the world's first plug-in hybrid vehicle, the F3DM, in 2008. As the demand for cleaner energy alternatives grew, BYD expanded its operations further into the realm of electric buses, taxis, trucks, and forklifts. Today, BYD is a world leader in electric vehicle and battery technology, guided by its mission "to change the world by creating a complete, clean-energy ecosystem."

Mission Statement

BYD's mission statement is:

"BYD’s (Build Your Dreams) mission is to change the world through technological innovation that reduces greenhouse gasses and our dependency on fossil fuels.

This mission reflects BYD's commitment to driving innovation in battery technology and promoting sustainable development.

Segments covered by BYD

Electric Vehicles

BYD is a leading player in the global electric vehicle market, manufacturing a diverse range of products including electric cars, buses, trucks, and taxis. The company is well-known for its proprietary battery technology, which gives its electric vehicles a competitive edge in terms of range and efficiency.

Renewable Energy

BYD has established itself in the renewable energy sector with solutions such as solar panels, energy storage systems, and rail transit. The company's renewable energy products are crucial components of its broader vision for a clean-energy ecosystem.

Batteries and Energy Storage

As a top manufacturer of rechargeable batteries, BYD's products are used in a wide array of applications, from mobile phones and laptops to electric vehicles and energy storage systems. The company's cutting-edge battery technology is a key component of its success in the electric vehicle market.

Mobile Components

BYD also operates in the electronics industry, supplying components for mobile phones, computers, and other digital devices. The company's clients include major global tech companies.

Automotive Components and Assembly

BYD has significant operations in automotive parts manufacturing and assembly, supplying a wide range of components to both its own vehicle division and other automobile manufacturers.

Others

Other sectors BYD is involved in include rail transit and LED lighting. The company also has significant investments in semiconductor technologies, a critical element for the development of its electric vehicles and renewable energy products.


In summary, BYD Company Ltd. represents a diverse conglomerate operating primarily in the electric vehicle and renewable energy sectors, while also maintaining significant operations in batteries, mobile components, and automotive parts. The company's mission and strategic focus on sustainability and innovation have positioned it as a leader in the global transition towards cleaner energy technologies.

BYD: On-going and future projects

BYD has a number of on-going and future projects that are aimed at expanding its business and capturing new markets. These projects include:

  • The development of new battery technologies: BYD is investing heavily in the development of new battery technologies, such as solid-state batteries and lithium-air batteries. These new technologies have the potential to offer higher energy densities and longer battery life than traditional lithium-ion batteries.
  • The expansion of its electric vehicle production capacity: BYD is increasing its electric vehicle production capacity in order to meet the growing demand for electric vehicles. The company is also expanding its global footprint, opening new manufacturing plants in Europe and the United States. BYD's electric vehicle production capacity is expected to reach 2 million vehicles per year by 2025.
  • The development of new renewable energy projects: BYD is investing in a number of renewable energy projects, including solar and wind farms. The company is also developing new battery storage technologies that will help to integrate renewable energy into the grid. BYD's renewable energy projects are expected to generate 10 gigawatts of electricity by 2025.
  • The release of new vehicle models: BYD is planning on releasing a number of new vehicle models in the coming years. These models include the Dolphin, Ocean-X, Seal, Han EV, and Tang EV.

These are just a few of the on-going and future projects that BYD is working on. The company is committed to innovation and growth, and it is well-positioned to be a major player in the global technology market.

BYD is a well-positioned company with a strong track record of innovation. The company's on-going and future projects are aimed at expanding its business and capturing new markets. These projects have the potential to make BYD a major player in the global technology market.

Valuation

DCF

$ million Projected
Income Statement 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Revenue 100,207,703 102,650,614 121,790,925 121,778,117 153,469,184 171,539,037 191,736,481 214,312,024 239,545,668 267,750,386
% growth 2.44% 18.65% -0.01% 26.02% 11.77% 11.77% 11.77% 11.77% 11.77%
EBIT 14,358,257 12,851,411 13,379,454 13,495,001 20,789,471 23,386,560 26,308,085 29,594,577 33,291,628 37,450,527
% sales 14.33% 12.52% 10.99% 11.08% 13.55% 12.49% 12.49% 12.49% 12.49% 12.49%
Taxes -1,088,398 -703,705 -829,447 -312,274 -868,624 -823894.04 -781467.47 -741225.65 -703056.10 -666852.09
% EBIT -7.58% -5.48% -6.20% -2.31% -4.18% -5.15% -5.15% -5.15% -5.15% -5.15%
Cash Flow items
D&A 7,027,569 7,092,495 9,426,520 9,840,129 12,518,675 13,467,585 14,488,422 15,586,638 16,768,098 18,039,113
% of sales 7.01% 6.91% 7.74% 8.08% 8.16% 7.58% 7.58% 7.58% 7.58% 7.58%
% of Capex 56.75% 49.98% 51.08% 50.58% 99.63% 61.60% 61.60% 61.60% 61.60% 61.60%
0 0 0 0
Capex 12,384,399 14,191,948 18,452,645 19,455,153 12,565,583 14,211,647 16,073,341 18,178,913 20,560,310 23,253,666
% of sales 12.36% 13.83% 15.15% 15.98% 8.19% 13.10% 13.10% 13.10% 13.10% 13.10%
Changes in NWC -14,006,913 966,425 147,139 6,236,756 6,101,620 5,969,413 5,840,070 5,713,530 5,589,731
% of sales -13.65% 0.79% 0.12% 4.06% -2.17% -2.17% -2.17% -2.17% -2.17%
% of change in sales -573.37% 5.05% -1148.81% 19.68% -424.36% -424.36% -424.36% -424.36% -424.36%
DCF
Revenue 100,207,703 102,650,614 121,790,925 121,778,117 153,469,184 171,539,037 191,736,481 214,312,024 239,545,668 267,750,386
% growth 2.44% 18.65% -0.01% 26.02% 11.77% 11.77% 11.77% 11.77% 11.77%
EBIT 14,358,257 12,851,411 13,379,454 13,495,001 20,789,471 23,386,560 26,308,085 29,594,577 33,291,628 37,450,527
% margin 14.33% 12.52% 10.99% 11.08% 13.55% 12.49% 12.49% 12.49% 12.49% 12.49%
Taxes -1,088,398 -703,705 -829,447 -312,274 -868,624 -823,894 -781,467 -741,226 -703,056 -666,852
% of EBIT -7.58% -5.48% -6.20% -2.31% -4.18% -5.15% -5.15% -5.15% -5.15% -5.15%
EBIAT 13,269,859 12,147,706 12,550,007 13,182,727 19,920,847 22,562,666 25,526,618 28,853,351 32,588,572 36,783,675
D&A 7,027,569 7,092,495 9,426,520 9,840,129 12,518,675 13,467,585 14,488,422 15,586,638 16,768,098 18,039,113
% of sales 7.01% 6.91% 7.74% 8.08% 8.16% 7.58% 7.58% 7.58% 7.58% 7.58% 0.00%
0 0 0 0 0
Capex 12,384,399 14,191,948 18,452,645 19,455,153 12,565,583 14,211,647 16,073,341 18,178,913 20,560,310 23,253,666
% of slaes 12.36% 13.83% 15.15% 15.98% 8.19% 13.10% 13.10% 13.10% 13.10% 13.10%
Changes in NWC -14,006,913 966,425 147,139 6,236,756 6,101,620 5,969,413 5,840,070 5,713,530 5,589,731
% of sales -13.65% 0.79% 0.12% 4.06% -2.17% -2.17% -2.17% -2.17% -2.17%
Unlevered FCF 7,913,029 19,055,166 2,557,457 3,420,564 13,637,183 15,716,984 17,972,286 20,421,006 23,082,830 25,979,391 TV


WACC

Risk free rate  (5 year US Bond) 4.20%
Market risk premium 5.00%
Levered beta 0.64
Cost of equity 7.40%
Cost of debt 5.00%
Share price (as of 05/07/2023) 67.94
Shares outstanding (latest reported) 2861142855
Market capitalization 1.94E+17
Internally calculated WACC 7.400000%
Terminal growth rate 5.000%
Equity Value 1182930437
Shares 2861142855
Share Price RMB 0.41
Current Share Price $                                67.94
WACC
6.00% 6.50% 7.00% 7.40% 8.00% 8.50% 9.00%
3.5% $                      0.39 $                    0.33 $            0.29 $            0.26 $            0.22 $            0.20 $            0.19
Terminal 4.0% $                      0.49 $                    0.39 $            0.33 $            0.29 $            0.25 $            0.23 $            0.20
Growth 4.5% $                      0.65 $                    0.49 $            0.40 $            0.34 $            0.29 $            0.25 $            0.23
Rate 5.0% $                      0.97 $                    0.65 $            0.49 $                     0.41 $            0.33 $            0.29 $            0.25
5.5% $                      1.93 $                    0.97 $            0.66 $            0.52 $            0.40 $            0.33 $            0.29
6.0% #DIV/0! $                    1.94 $            0.98 $            0.70 $            0.50 $            0.40 $            0.34

Relative Valuation

Company Market Cap P/S P/E EV/EBITDA EV/EBIT
Tesla 823B 9.6 69.8 47.5 61.9
Toyota 31T 0.8 12.7 9.1 15.9
Porsche 101B 1.8 13.4 6.9 9.5
Mercedes Benz 76.1B 0.5 5.1 4.5 6.1
Audi AG 83.4B 1.4 11.3 10.2 10.2
Volkswagen 73.7B 0.3 5.9 2.7 6.5
Ferrari 70.2B 13.2 70.9 38 55
BMW 69B 0.5 6.2 3.9 6.2
Daimler 67.4B 0.4 3.7 4 5.4
Stellantis 51.9B 0.3 3.4 0.9 1.2

References

  1. ↑
  2. ↑
  3. ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7
  4. ↑ 4.0 4.1
  5. ↑ "Berkshire Hathaway sells $58.9 million worth of shares in China's BYD".
  6. ↑ "Berkshire Hathaway sells $58.9 MLN worth of shares in China's BYD". Reuters. 8 May 2023.
  7. ↑
  8. ↑ 8.0 8.1
  9. ↑ "Samsung sells $1.3 bn stake in China's BYD, keeps watchers puzzled".
  10. ↑
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