pBYDAutomobiles&ComponentsForecastChangeAsiaChinaIndustryBYDDate30August2017DeutscheBankMarketsResearchAnalystbriefingtakeawaysBYDhostedapost-resultsanalystbriefingon29August.Keytakeawaysare:OurSOTP-derivedTPsarebasedon1)apeeraverageFY18EP/Eof14.9xand16.0xforthehandsetbusinessandbatterybusinessrespectively.Keyrisksincludetoweakerorstrongercarsales,marginrecoveryforbatteryandhandsetcomponents,newmodelsalesoutlook.■In1H17,BYDrecordeda19.9%YoYdeclineinpassengernewenergyvehicle(NEV)sales,anda22.9%YoYdeclineincommercialNEVsales,duetocutsingovtsubsidiesandchangestotheofficialeligibilitylistforrecommendedvehicletypesthatqualifyforsubsidies.However,mgmtispositiveaboutthefuturegrowthofpassengerNEVsalesastheywillintroduceseveralnewmodels.MgmtexpectsBYD'smarketshareinpassengerNEVtobestableatc.30%overthenextthreeyears.■FortheNEVmodelpipeline,BYDwilllaunchthepure-electric(EV)versionoftheYuanSUVinJune2018,withadrivingrangeofmorethan250km.Managementexpectsthisvalue-for-moneymodeltosellc.5,000unitspermonth,mainlyinlower-tiercitiesinShandong,HebeiandHenan.Inaddition,BYDwillintroducethenewgenerationQinsedan,TangSUVandaplug-inhybridEV(PHEV)versionoftheSongSUVin2018.■BYDhas17kunitsofNEVbusordersonhand,andwilldeliverc.15kunitsin2017.ManagementispositiveaboutfuturegrowthofcommercialNEVs,astherearemorethan30citiespromotingelectricbuses.Anotherstrongdriveristheconversionofconventionalenvironmentalsanitationvehicles,mixertrucksanddumptruckstoelectricvehiclesinthefuture.Allinall,managementexpectsac.50%YoYgrowthrateforcommercialNEVsforthenextthreeyears,andagrossprofitmarginofaround20%.■Thefirst40kmMonorailprojectwillbecompletedinNingxiaYinchuannextmonth.BYDiscurrentlynegotiatingwitharound20citiesforpotential2018Monorailprojects,whichwillmainlybeinpublic-private-partnership(PPP)formatandhavebetterprofitabilitythantheNEVbusiness.Accordingtomgmt,Monorailwillrecordc.RMB5bninrevenuein2017.■BYD'sNEVbatteryproductionvolumeisexpectedtoreachc.10Gwhin2017(7.6Gwhin2016).Currently,thetotalproduct...
