BYD stands at a new starting point of revenue of 200 billion yuan

In the wave of new energy capital in the past year, BYD is undoubtedly one of the most brilliant existences. On it, it carries the dream of investors for independent brand new energy vehicles to go to a higher place.

BYD confirmed investors' expectations with an overall good financial report.

According to the 2021 financial report disclosed by BYD on March 29, BYD achieved revenue of 216.142 billion yuan during the period, an increase of 38.02% year-on-year.

Specifically, the automobile business contributed the most, with annual revenue of 112.489 billion yuan, an increase of 33.93% year-on-year; the revenue of mobile phone parts, assembly and other products was about 86.454 billion yuan, an increase of 43.99% year-on-year; the revenue of the rechargeable battery and photovoltaic business was about 16.471 billion yuan, an increase of 36.27% year-on-year.

This is also the first time that BYD's revenue in the automotive business sector has exceeded 100 billion, and it ranks among the first-line legions of its own brands together with great wall and Geely.

Although on indicators such as profits, many investors have divergent views on BYD. However, more investors see the foreseeable future from BYD's financial report: further increase in the market share of new energy vehicles; rapid growth in semiconductor and battery businesses.

As BYD President Wang Chuanfu said at the Electric Vehicle 100 People's Meeting a few days ago, "Last year was the first year of China's new energy vehicle development, and the industry entered a new stage of market-oriented development and achieved a milestone leap."

After the initial outbreak period, the entire new energy vehicle market has gradually shifted from policy-driven orientation to being determined by market demand.

Although the overall market size will still grow exponentially, serious challenges including rising raw material prices and unstable supply chains have made players in the field realize that the next market will be cruel. Some of the 2021 net red models have been "selling one and losing one" because of cost problems, and have to stop taking orders and withdraw from the market scale war.

In the next battle of the new energy vehicle market, scale, supply chain cooperation and product structure will be the core that players in the field need to cultivate in the second half of the competition. BYD intends to tell investors through the financial report that it will be one of the most powerful players.

Based on multi-party data, BYD's cumulative sales of passenger cars will reach 730,000 units in 2021, of which new energy vehicles will sell 593,700 units. Sales of EV (electric) models and DM (hybrid) models increased by 144.9% and 467.6% year-on-year, respectively, to 320,000 units and 270,000 units, respectively.

This also made BYD's annual share of the new energy vehicle market reach 17.1%.

According to the minutes provided by investors, BYD management said that the penetration rate of new energy vehicles in the first three weeks of March has reached 30%, and from the perspective of the whole year, the penetration rate may further reach 40% by the end of the year.

This means that from a full-year perspective, sales of new energy vehicles in 2022 may exceed 6 million.

This is both an opportunity and a challenge for BYD. Investors familiar with BYD said that bydir's conservative sales target of 1.5 million vehicles, if the supply chain is highly coordinated, it is expected to reach a higher target.

Scale and production capacity are the focus of BYD's current efforts.

The financial report shows that BYD has been expanding its production capacity in 2021. Among them, the construction in progress in 2021 was 20.277 billion yuan, an increase of more than twice the 6.112 billion yuan in 2020, and the number of employees increased significantly from 224,000 in 2020 to 288,200.

In terms of research and development, BYD's R&D expenditure in 2021 totaled 10.63 billion yuan, an increase of 24% year-on-year. Among them, 5.15 billion yuan was used for automobile projects and 2.18 billion yuan was used for battery projects.

This is ALL OF BYD's preparations for a more severe scale battle this year. According to BYD's plan, starting from May this year, a number of automobile production bases including Changzhou, Hefei and Changsha will be put into operation, and Fudi Battery is also expanding production in many places.

With the production capacity of these plants, BYD's overall production capacity will be further increased to 2.2 million units in 2022 and 3.6 million units by 2023.

Guosen Securities pointed out in the research report that with the launch of BYD's models including Denza brand and high-end brands in 2022, the rich model matrix will help the company hit the annual sales of 2 million vehicles.

Tianfeng Securities believes that BYD is expected to improve profitability by significantly increasing the dilution cost of production.

In addition, industry insiders pointed out that with the launch of new depressive models and high-end brand models, the high-end of BYD's product line will also help BYD optimize profit performance. BYD said that its high-end brand price range is expected to be more than 500,000 yuan - 1 million yuan.

In addition to the strength of the automotive sector, BYD's development in semiconductors, batteries and other business areas has also performed prominently.

At present, BYD Semiconductor's market share is second only to Infineon's, with 19%, ranking first among domestic manufacturers. It is reported that the spin-off and listing of BYD Semiconductor is steadily advancing.

And BYD's battery business, Fordy Battery, has expanded many external customers. Domestic and foreign companies, including Hongqi, Changan Ford, Hyundai Motor and other companies, have reached purchase agreements with Fordy Battery. According to reports, Weilai and Xiaomi are also negotiating cooperation with Fudi Battery.

As Wang Chuanfu said before, subsidiaries only earn BYD's money is not called skill, and it is called skill when it is dismantled to earn money in the market. By splitting off sub-divisions such as Fordy Battery, BYD Semiconductor and Powertrain Division, BYD Power, MARKET-oriented development has given BYD's future performance and profitability a new imagination.

For BYD, with the continuous breakthrough of new energy vehicle sales and the steady advancement of the marketization of many businesses, the revenue of 200 billion yuan is only a new beginning.

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