[ET Net News Agency, 23 August 2019] Daiwa Research chopped its target price for BYD
Company (01211) to HK$57 from HK$70 and maintained its "buy" rating.
The research house cited BYD management from an analyst meeting expecting short-term
headwinds in profitability due to the NEV subsidy cut, while it believes the ongoing cost
control and technology breakthrough will help offset the negatives over 2H 2019-2021.
BYD expects a 71-90% decline in net profit in 3Q to CNY100-300m, primarily due to the
NEV subsidy cut, which would negatively impact the gross margin, partially offset by cost
savings on technology improvement. Meanwhile, management expects a one-off expense for the
securitisation of its account receivables.
Daiwa cut its 2019-21 EPS forecasts by 20-23% after factoring in the lower-than-expected
3Q guidance. (KL)