Citi: Maintains "Buy" rating on BYD Company Limited (01211), target price HK$142; ultra-fast charging ecosystem expected to become a new revenue source.

Citi released a research report stating that BYD Company Limited's (01211) ultra-fast charging ecosystem will become a new revenue source, with gross margins expected to reach 63% and 59% in 2027 and 2030 respectively, and net margins of 20% and 12% respectively. By 2030, it could contribute approximately RMB 21.6 billion in net profit, with revenue expected to reach RMB 177.9 billion. Citi gives a "Buy" rating on BYD Company Limited's H-shares, with a target price of HK$142. The bank noted that based on 8x P/E in 2030, discounted to 2027 at a 12% weighted average cost of capital, the ecosystem is valued at RMB 123 billion, equivalent to RMB 15.7 per share, accounting for approximately 17% of BYD Company Limited's current A+H market capitalization. The bank also estimates that for every 1% increase in BYD Company Limited's new energy vehicle market share, its per-vehicle R&D and depreciation/amortization costs could decrease by 2.6%, with a per-vehicle net profit gain of RMB 881, equivalent to an additional approximately RMB 5.3 billion in net profit for 2027. Additionally, the bank expects that the layout for intelligent connected new energy vehicles in the national "15th Five-Year Plan" will promote industry consolidation, benefiting leading automakers' operating leverage and cost reduction. Concentration in the domestic fuel vehicle, pure electric, plug-in hybrid, and extended-range sub-markets has already increased, and fierce price wars are no longer a reasonable strategy.