BYD’s Auto Business Highlights Profitability-Comments on 2022 Third Quarterly Report

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$BYD(SZ002594)$

BYD Electronics and BYD Co., Ltd. have just announced their third-quarter results. In the third quarter of this year alone, BYD Co., Ltd. made a profit of 5.716 billion, basically in the midpoint of the forecast range (5.5-5.9 billion).

The most eye-catching figure in this three-quarter report is the profitability of BYD’s auto business, which has greatly improved with the rapid growth of scale.

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The gross profit margin of BYD’s auto business has risen from 17.82% in the second quarter to 22.75% in the third quarter, nearly 5 percentage points.

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This trend is clearly seen here. With the explosion of BYD’s auto business scale, the profit level of bicycles has been greatly improved, and the gross profit margin and net profit level have also been greatly improved. (Note that in this third quarterly report, an asset impairment loss of RMB 787 million has been accrued, which is directly deducted from the profit.)

It is predicted that BYD’s annual profit level in 2022 will reach 17 billion, and next year’s profit level will reach 40 billion. BYD’s profitability is likely to cross the 100 billion level in 2025.

BYD Trends:

First, the number of employees, next year will be the world’s largest manufacturing industry.

Second, China’s manufacturing industry will be the first in terms of revenue next year.

Third, the profit will surpass that of the Ningde era next year and approach Maotai.

Fourth, the number of R&D personnel will approach Huawei next year, becoming the only two technology companies in China (and probably the world) with an army of 100,000 R&D engineers.

It can only be said that, as the only company in the entire automobile industry chain in the world, scale is an exponential blessing for BYD’s profitability.

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