Nomura lowered its target price for BYD Company (01211) to HK$39.2 from HK$45.1 and maintained its "reduce" rating.
The research house said BYD's 2Q net income of CNY705mn was in line with guidance, although SG&A expenses were lower than Nomura's estimate on possible merits of better
distribution efficiency.
Management guided for 3Q net profit of CNY100-300mn. Nomura believes this can be largely attributed to the impact of the new subsidy policy that became effective in late-June.
Along with BYD's commitment to keeping its NEV (new energy vehicle) selling prices within the less supportive subsidy framework, Nomura expects its NEV margins to face further pressure from 2H.
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