BYD Financial Report: First Quarter Net Profit Expected to Increase 5-7 Times This Year's Car Sales Target of 650,000

On March 27, 2018, BYD (002594) released its annual results report, in which the Company realized operating income of RMB 13.055 billion yuan, up 22.79% year-on-year, and the net profit attributable to the shareholders of the listed company of RMB 2.78 billion yuan. Meanwhile, BYD expects net profit for the first quarter of 2019 to be 700-900 million yuan, up 583.39%-778.65% year-on-year. Global sales topped the list for the fourth consecutive year, with a target of 650,000 vehicles this year. Overall domestic car sales fell for the first time in 28 years since 2018. According to the China Association of Automobile Manufacturers, domestic auto production and sales were 27.809 million and 28.081 million vehicles, respectively, down 4.2% and 2.8% compared with 2017. While the domestic auto market is slowing down, BYD's car sales are growing at a contrarian pace. Sales of passenger cars totaled 500028 vehicles in 2018, up 23% from a year earlier, according to official data from BYD. Sales of new energy vehicles reached 247,811, up more than 90 percent year-on-year, with footprints in more than 50 countries and more than 300 cities on six continents. Reflected in the financial data, during the reporting period, the revenue of BYD's automotive business was about 76.007 billion yuan, accounting for 58.44% of the total revenue, up 34.23% year-on-year, and achieved rapid growth against the trend. In response, BYD said that the Group's fuel car business as a whole remained stable in 2018. (New Energy Vehicle Sales Statistics, January-February 2019) At the same time, the rapid development of the new energy vehicles industry; and Driven by the Group's new product cycle, BYD Group's sales of new energy vehicles achieved rapid growth. Public information shows that, so far, BYD has been the world's new energy vehicle sales champion for four consecutive years, the leading position in the industry has been further consolidated. This positive trend of contrarian growth continues. According to the announcement, sales of BYD's new energy vehicles reached 43,097 vehicles in January-February 2019, up 174.73% year-on-year, with the market share climbing further to about 30%. With sales boosted, BYD is confident in the new-energy car market. BYD recently said it aims to sell 650,000 vehicles in 2019, and will further strengthen research and development, enhance product competitiveness, accelerate the launch of new models to meet the rapid growth of market demand. The announcement shows that BYD expects net profit for the first quarter of 2019 to be 700-900 million yuan, up 583.39%-778.65% year-on-year, exceeding market expectations. Industry analysts said, in the car market pre-cooling and subsidy recession under the double attack, BYD is still maintaining sustained growth in sales performance, highlighting its brand, technology, market development and other aspects of the industry in obvious advantages, in the future can also maintain a steady upward trend of development, with strong profitability and higher investment value. It is noteworthy that BYD's annual net profit in 2018 was 2,780 million yuan, compared with 102 million yuan, 377 million yuan, 1,048 million yuan and 1,263 million yuan in the first quarter and the fourth quarter, respectively. Now rising quarterly. Judging from the net cash flow generated from operating activities, BYD's cash flow has changed from negative to positive since the third quarter of 2018, with a net cash flow of RMB12, 523 million for the whole year, representing an increase of 90.35% over the same period of last year, and the Company's capital pressure has gradually decreased. Overall, BYD has achieved a steady upward trend of development. Battery, rail business in addition to the automotive business, batteries, electronics and rail business as BYD's main business sector, has become its potential business can not be underestimated. As far as the power battery business is concerned, Bloomberg New Energy predicts that by 2030, the global demand for power batteries will exceed 1,500 GWh, and there will be vast development space for power batteries in the future. This future market for the first to enter the head of the enterprise obvious advantages, BYD with long-term power battery production experience and sustained high R D investment to maintain technology leadership. With the improvement of the battery industry chain layout in 2018 and the intelligent automation of the new plants, BYD expects the power pool capacity to reach 65GWh in 2020. Not only that, BYD can achieve external and internal supply in the battery business, and cost-sharing through economies of scale, become an important profit growth point of the company 's future earnings. In addition, BYD's independently developed "cloud rail", "cloud bus" and other rail transport products, committed to working with the subway to build a "large, medium-sized transport capacity matching, underground ground and air coordination" three-dimensional transportation network. Among them, the cloud orbit project has completed surveys conducted by several city organizations worldwide, and Cooperation, Yinchuan Huaboyuan section of the cloud track line has been opened to traffic. Meanwhile, BYD is actively exploring overseas markets and has signed a cloud orbit project with Salvador, Brazil (with an order amount of about US $689 million), as well as strategic cooperation agreements with the Philippines, Cambodia and other countries. In recent years, the state has continuously supported the development of the new track system in terms of policy. All localities are also grasping the development opportunities and promoting the integrated development of multi-level, multi-mode and multi-standard rail transit systems.