June 2, 2016
<Research Report>BofAML Lifts BYD COMPANY Target to $63.4; Raises FY16 Profit Forecast by 40%
Bank of America Merrill Lynch raised BYD COMPANY (01211.HK) 2016 EPS from RMB1.29 to RMB1.81, representing a rise of 40%.
Such upward adjustment was mainly due to product-mix changes.
The research house also increased 2016 auto-PBT margin estimates by 3.8 ppts to 11.8%.
The rating was reiterated at Buy and the target price was lifted to $63.4 from $61.77, representing 31x P/E.
The broker estimates that following the improvement of quality of batteries, the battery costs per vehicle will further decrease.
Another catalyst is that Bank of America Merrill Lynch expects BYD COMPANY to start selling its auto-battery to third parties from next year, further enhancing long-term utilization and margin visibilities.
Source: AAStocks Financial News