Half-year revenue of 20.2 billion yuan! How did BYD Company Limited (002594.SZ) ascend to the top of A-share "Research and Development King"?

In recent years, with the rapid development of Chinese car companies in technology, brand, service, and a deep understanding of the local market and consumer needs, electrification has weakened the technological barriers of traditional fuel vehicles, and China's brand market share continues to rise. This trend is evident in the semi-annual reports disclosed by major mainstream listed car companies for 2024. The financial report shows that BYD Company Limited (002594.SZ) had a first half revenue of 301.127 billion yuan, a year-on-year increase of 15.76%, surpassing SAIC Motor Corporation for the first time and ranking first among domestic mainstream car companies. In addition, BYD Company Limited had a first half net profit of 13.631 billion yuan, a year-on-year increase of 24.44%, also ranking first in the industry. From the financial report, it is clear that the first-half revenue of independent brands has grown rapidly. In addition to BYD Company Limited, companies like Geely, Great Wall, Chongqing Sokon Industry Group Stock, NIO, and XPeng have seen rapid revenue growth. In contrast, joint venture brands, once seen as "cash cows" contributing most profits to large car groups, are no longer shining. The profits of mainstream joint venture brands have almost all declined, with Guangzhou Automobile Group's joint venture profits down 40% in the first half of the year, Dongfeng Group's joint venture profits down 46%, and SAIC-GM losing 2.275 billion yuan. Behind the high-speed growth of independent brand performance is the comprehensive surpassing of product strength through huge R&D investment. In the case of BYD Company Limited, R&D investment in the first half of the year ranked first, reaching 20.2 billion yuan, a year-on-year increase of 42%, hitting a historical high and surpassing the net profit by 6.6 billion yuan. Looking at the first half of the year, BYD Company Limited's R&D investment exceeds that of Tesla (16.1 billion yuan), almost equal to the sum of Great Wall Motor (6.38 billion yuan), NIO (6.08 billion yuan), Geely Auto (4.55 billion yuan), and Chongqing Changan Automobile (4.61 billion yuan). R&D investment far exceeding net profit is another proof of BYD Company Limited's high regard for technology R&D. By comparing R&D investment with net profit, in the past 14 years (from 2011 to present), BYD Company Limited has had 13 years with R&D investment higher than net profit, sometimes even several times higher. By current estimation, BYD Company Limited's full-year R&D investment in 2024 is expected to reach the level of 50 billion yuan. Furthermore, looking at the entire A-share market, data from Wind shows that in the first half of this year, BYD Company Limited rose to first place on the R&D expense list, becoming the undisputed "king of R&D" among more than 5300 listed companies in A shares. This long-term, high-intensity R&D investment has enabled BYD Company Limited to build a huge pool of technology. This year, BYD Company Limited successively released groundbreaking technologies such as the Xuanji architecture, fifth-generation DM technology, and Easy Three, providing strong support for rapid sales growth. In the first half of this year, BYD Company Limited achieved sales of 1.61 million vehicles, ranking first in the Chinese car market and also becoming the champion of the global new energy car market. In 2023, BYD Company Limited entered the top ten global car manufacturers for the first time. According to data from MarkLines, in the second quarter of this year, BYD Company Limited's sales surpassed Honda, becoming the seventh largest car manufacturer worldwide. According to the latest data from Yiche.com, BYD Company Limited's monthly sales in July jumped to third place globally, second only to Toyota and Volkswagen. The complete surpassing of the leader of independent brands over the leader of joint venture brands strongly confirms the increasingly solid position of Chinese brands in the domestic market and also shows that the trend of new energy vehicles replacing fuel vehicles is irreversible. In July of this year, the monthly penetration rate of new energy vehicles exceeded 50% for the first time, with this data expected to continue to rise in August. NIO Chairman Li Bin believes that the domestic penetration rate of new energy vehicles has already exceeded 50%, and both pure electric and plug-in hybrid vehicles will accelerate the replacement of fuel vehicles. He predicts that within two years, the penetration rate of new energy vehicles in the Chinese market will exceed 80%. In the next few years, joint venture fuel vehicles will face huge troubles as they will give way to new energy vehicles. This round of the car industry's elimination game is already more than halfway through, with car companies seeking ways to survive. Chinese brands are accelerating their pace, leaving little time for joint venture fuel vehicles.