Dongwu Securities: Maintains "Buy" Rating for BYD, Overseas Sales Continue to Grow Rapidly

Dongwu Securities research report indicates that BYD's July sales reached 419,000 units, an increase of 4% month-on-month, with exports hitting a new high. It is expected that in 2026, sales will exceed 5 million units, an increase of 9% year-on-year, with overseas sales estimated at 1.8-1.9 million units, representing a 75% increase, and domestic sales estimated at 3.15 million units, a year-on-year decrease of 11%. The switch to the second-generation blade battery is accelerating, and it is expected that the transition for all models will be completed by the end of 2026, with the first batch of models equipped with this battery being launched progressively, further enhancing product competitiveness and likely driving a gradual rebound in domestic sales in the second half of the year. The high prices of lithium carbonate are mainly concentrated in Q2 2026, after which the pressure from raw material costs is expected to gradually ease. At the same time, the overseas sales ratio continues to rise, and high-end brands are growing rapidly, with both average prices and profit levels for overseas and high-end models being relatively high. It is expected that the optimization of the sales structure, combined with alleviated cost pressures, will drive a gradual improvement in per-unit profitability for the company. With sustained high growth in overseas sales and the transition to the second-generation blade battery expected to boost domestic sales, the original profit forecast is maintained. It is anticipated that the company's net profit attributable to the parent will reach 40.4 billion, 50.5 billion, and 63.6 billion yuan in 2026-2028, representing year-on-year growth of +24%, +25%, and +26% respectively, corresponding to a PE ratio of 22, 17, and 14 times. The "buy" rating is maintained.