BYDs P / E ratio is nearly 140 times, which is the unusual success of Buffett?

category:Finance
 BYDs P / E ratio is nearly 140 times, which is the unusual success of Buffett?


After publishing the October sales volume and the third quarter report, many securities companies continued to cheer for BYDs share price. The uniqueness of the whole industry chain of new energy vehicles, the substantial growth of the industry, and the stable cash flow brought by new businesses such as medical protection have become the reasons why the seller analysts continue to be optimistic about BYD.

According to the October sales express released by BYD, the sales volume of pure electric vehicles reached 14919, nearly doubling year-on-year data. The total sales volume of the companys automobiles was 47732, with a year-on-year growth rate of only 16%. In this regard, Han Weidong, an analyst at Guoxin Securities (Hong Kong), said that the growth rate of new energy vehicle sales in October further increased significantly, the main driving force was to increase the promotion of new energy vehicles under relatively good subsidy conditions; the domestic market demand for new energy vehicles recovered well, and it is expected that BYDs sales performance of new energy vehicles in November and December is expected to continue high growth.

Shao Jiang, an analyst with Everbright Securities, said the companys cash flow increased by 650 million yuan in the first three quarters (a net decrease of 1.61 billion yuan in the same period in 2019). The main reason for the improvement of cash flow is the positive contribution of medical protection business to cash flow of operating activities. BYD controls capital expenditure, and cash outflow from investment activities decreases year on year. Medical protection business provides cash flow support for R & D expenditures of other businesses, which is conducive to enhancing the competitive advantages of battery, new energy vehicles and mobile phone businesses.

Liang Yonghuo, an analyst with China Merchants Securities (Hong Kong), said that the value of BYDs whole industry chain model began to release. BYD is the only company in the auto industry that fully controls the whole vehicle and core components of the new energy automobile industry chain, including car body, battery, motor, electronic control, etc., with independent research and development technology and scale effect, BYD has lower manufacturing costs than its competitors.

BYD estimates that the net profit attributable to shareholders of the parent company will be 4.2 billion to 4.6 billion yuan in 2020 (up 160% to 185% year-on-year). BYD said that the automobile industry continued to improve in the fourth quarter, and the sales of new energy vehicles increased steadily. A large number of orders are in hand for the companys new flagship model Han and the modified flagship model Tang, which are expected to continue to promote the strong growth of new energy vehicle sales. In the field of new energy commercial vehicles, the bus market is expanding smoothly with good reputation, and its sales volume is expected to increase significantly compared with the same period last year.

An official in charge of a power battery told the first finance and economics reporter that the automobile industry is in a period of transformation, among which the direction of electrification is the most clear. Both the capital market and automobile enterprises will bet more chips on electric vehicles. Recently, the general office of the State Council officially issued the new energy vehicle industry development plan (2021-2035) to further clarify the future development direction of Chinas new energy vehicles. At the Guangzhou auto show, which started on November 20, fuel vehicles and electric vehicles are really the prelude to the contest.

Many people in the market believe that because of the huge growth space of electric vehicles, BYDs share price has been adjusted by nearly 20% before, which has created a good opportunity to increase the position. However, there are different views on its long-term value. A well-known Hong Kong stock fund manager told the first finance and economics reporter that BYDs return on net assets is far from meeting the requirements of its allocation, and has been lower than 5% for the past two consecutive years. In fact, this is rare in terms of Warren Buffetts successful position. The growth of BYDs share price is more due to the improvement of valuation, but there are not many factors from the performance growth. The P / E ratio of more than 100 times is obviously high. We dont consider individual stocks with return on net assets below 13%. Its very simple. Its better to buy bank stocks. From 2017 to 2019, BYDs roe levels are 7.76%, 4.96% and 2.62% respectively, and the weighted average roe in the first three quarters of 2020 is 5.89%. Source: Wang Wenhua, editor in charge of the first finance and Economics_ NF5982

Many people in the market believe that because of the huge growth space of electric vehicles, BYDs share price has been adjusted by nearly 20% before, which has created a good opportunity to increase the position. However, there are different views on its long-term value.

A well-known Hong Kong stock fund manager told the first finance and economics reporter that BYDs return on net assets is far from meeting the requirements of its allocation, and has been lower than 5% for the past two consecutive years. In fact, this is rare in terms of Warren Buffetts successful position. The growth of BYDs share price is more due to the improvement of valuation, but there are not many factors from the performance growth. The P / E ratio of more than 100 times is obviously high. We dont consider individual stocks with return on net assets below 13%. Its very simple. Its better to buy bank stocks.

From 2017 to 2019, BYDs roe levels are 7.76%, 4.96% and 2.62% respectively, and the weighted average roe in the first three quarters of 2020 is 5.89%.