 Logo since 2022 | |
| Type | Public |
|---|---|
| SEHK: 1211 SZSE: 002594 | |
| Industry | Conglomerate |
| Founded | February 1995 |
| Founder | Wang Chuanfu |
| Headquarters | , |
Area served | Worldwide |
Key people | Wang Chuanfu (Chairman, CEO) |
| Products | Gasoline and electric cars, battery-powered bicycles, buses, trucks, forklifts, monorail train and buses, photovoltaic modules (solar panels), face masks, rechargeable batteries, and handset components. |
| Revenue |  RMB 424 billion (2022)[1] |
| RMB 16.6 billion (2022)[2] | |
| Total assets | RMB 295.78 billion (2021)[3] |
| Total equity | RMB 104.24 billion (2021)[3] |
| Owner |
|
Number of employees | c.288,200 (2021)[3][10] |
| Subsidiaries | |
| Website | www.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.
Revenue Breakdown by Segment
As of the first half of 2022, BYD Group reported a total revenue of approximately RMB 150,607 million, representing a significant year-on-year increase of 65.71%. The revenue was generated from various business segments, with notable variations in their contributions.
Automobiles and Related Products Segment
The "Automobiles and Related Products" segment remains a core focus for BYD Group and is a pioneer and leader in the new energy vehicle industry. In the first half of 2022, this segment generated approximately RMB 109,267 million in revenue, representing a substantial year-on-year increase of 130.31%. The success of this segment can be attributed to BYD's commitment to technological innovation and continuous investment, which has allowed the Group to lead the scale and rapid development of the new energy vehicle industry.
Moreover, in the first half of 2022, BYD achieved significant market share in the domestic new energy vehicle market, reaching 24.7%, reflecting a remarkable 7.5 percentage point increment compared to 2021. This performance placed BYD in the No. 1 position globally for new energy vehicle sales, thereby leading the rise of Chinese independent brands in the electric vehicle sector.
Handset Components, Assembly Service, and Other Products Segment
The "Handset Components, Assembly Service, and Other Products" segment contributed approximately RMB 41,070 million in revenue during the first half of 2022. However, this represents a year-on-year decrease of 4.78%. Despite the decrease in revenue, this segment continues to offer diverse products and services, catering to various market needs.
This segment engages in multiple market segments, including smart phones, smart wearables, computers, Internet of Things, smart homes, game hardware, robots, drones, communication equipment, electronic atomizers, new energy vehicles (automotive intelligent systems), medical and health equipment, and more. The Group's strategy involves diversifying its market layout while actively developing new channels for business growth.
Revenue Distribution
The "Automobiles and Related Products" segment accounted for approximately 72.55% of the Group's total revenue during the first half of 2022, reflecting the significant impact of BYD's success in the new energy vehicle industry. On the other hand, the "Handset Components, Assembly Service, and Other Products" segment contributed around 27.27% of the Group's total revenue during the same period.
It is worth noting that historically, BYD's revenue mix has been relatively consistent over the past decade, with automobiles and related products contributing approximately 50% of total revenue, handset components and assembly services comprising about 40% of total revenue, and rechargeable battery and photovoltaics generating slightly less than 10% of the Group's total revenue.
Additionally, BYD has been actively diversifying its international presence, with overseas markets accounting for 30% of total revenue in 2021, indicating a strategic effort to expand its global reach and reduce dependency on the domestic Chinese market. However, the majority of the Group's revenues still come from the domestic Chinese market, including Hong Kong, Macau, and Taiwan, historically ranging from 84% to 90% of total revenue.
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
- ↑
- ↑
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 3.6 3.7
- ↑ 4.0 4.1
- ↑ "Berkshire Hathaway sells $58.9 million worth of shares in China's BYD".
- ↑ "Berkshire Hathaway sells $58.9 MLN worth of shares in China's BYD". Reuters. 8 May 2023.
- ↑
- ↑ 8.0 8.1
- ↑ "Samsung sells $1.3 bn stake in China's BYD, keeps watchers puzzled".
- ↑