Investment Summary

BYD`s 2017 and 2018Q1 result declined by 19.5% and 83% YoY due to the change of NEV subsidy policy. We expect 2018 H1 to be a low point for BYD`s automotive business. Still, with new energy vehicles and traditional fuel-engined vehicles exerting their power in H2, the Company`s net profit is expected to bottom out in H2 We give BYD Accumulate rating. (Closing price as at 10 May 2018)

Summary of Result

BYD has released its 2017 annual report and 2018 first-quarter report

In 2017, the Company recorded revenue of about RMB105.9 billion, an increase of 2.4% YoY; net profit attributable to parent company stood at RMB4.07 billion, a YoY decrease of 19.5%, which fell in the lower end of previous result forecast interval, equivalent to EPS of RMB1.4. The final dividend per share stood at RMB0.141 with dividend payout ratio of about 10%. The company recorded revenue of RMB34.74 billion in the first quarter of 2018, a YoY increase of 17.5%; net profit attributable to parent company stood at RMB100 million, a YoY decrease of 83%, whereas it recorded net profit of RMB606 million in the same period last year.