[ET Net News Agency, 22 May 2017] Credit Suisse said BYD Company (01211) is planning a
spin-off of its power battery business - supply external customers and sell some stake to
external investors.
After the spin-off, BYD estimates 5Gwh capacity could be used for outside supply vs.
in-house supply of 11Gwh. BYD also targets to expand its battery capacity to 26Gwh by
end-2017 (10Gwh for LFP and 16Gwh for NCM/NCA) and 50Gwh by end-2020.
BYD also guided to gradually selling some stake in non-core auto parts business, such as
seating, sun roof, dashboard, etc. It had adopted a vertical integration strategy in the
past with ~70% components made in-house. Now BYD plans to sell some non-core operations,
and focus on core components only (i.e., engine and transmission).
BYD targets 4k-5k units e-bus sales in 2Q17, a big spike vs 1Q17's 183 units (per CAAM),
thanks to the normalisation of ebus sales after being included in the subsidy eligible
list in April.
The company guided new monorail business to book a revenue of Rmb6/30 bn in 2017/18.
Guang'an project (10 km) and Shantou project phase #1 (20km) would complete construction
by Aug. and end-2017. While BYD's would develop the monorail project, it would be operated
by a JV with BYD (10%), local government (10%) and third-party investors (80%).
Credit Suisse maintained its target price of HK$70 and a rating of "outperform" for BYD.
(HL)