Many investors have shown interest in BYD in the past few months or are possibly already invested. This makes them like Berkshire Hathaway, the company managed by Warren Buffett and the late Charlie Munger. Despite some sales, Berkshire Hathaway still has a large position in BYD. Why? The stock remains attractive – and a special observation in these weeks.

BYD: Prices Drop BYD builds NEVs, i.e. vehicles with new drive technology, such as electric vehicles or hybrids. As always in the past weeks and months, BYD reported strong November figures for production and sales of these vehicles. The summary for the months 1-11 also showed that the sales figures should at least increase by more than 50, 60% compared to the previous year (according to my estimate).

The previously reported quarterly figures were also strong. As I have already told you, BYD was able to report record profits. The net profit was about 1.35 billion euros. BYD was able to report almost 80% more than in the previous quarter.

Revenue also soared. All of this should in principle be able to drive the stock price forward. Since 1 January, BYD has only achieved a plus of 9.9% so far. In the past weeks, the price has been tending to decline. And now BYD reported that the company is lowering the prices of its vehicles. A bad sign?

Revenue growth planned for the end of the year The idea behind it is at least to be discussed: BYD wants to increase turnover once again. This should – if it succeeds – be at the expense of the competitor Tesla, for example. The measure could work. Tesla had lowered its prices some time ago. The US Americans work with a lower gross margin than BYD (my latest figures were 17.9% for Tesla, 22.12% for BYD), so the Chinese still have room to maneuver.

So the plan could succeed in increasing turnover – and not letting the margins drop too much. BYD obviously wants to catch the competition off guard.

In general, BYD is at least not expensive. Depending on the source and quality of the assessments, the currently estimated P/E ratio will be less than 20. The P/E ratio should drop again next year. This makes BYD attractive, at least according to analysts. They currently come up with a target price of more than 40 euros.

BYD: Nice target price – WKN: 710000 – ISIN: DE0007100000 Source: https://fundamental.aktienscreener.com/DE0007100000/EI/mercedes-benz-group-ag/data

Many investors have shown interest in BYD in the past few months or are possibly already invested, mirroring Berkshire Hathaway, the company managed by Warren Buffett and the late Charlie Munger. Despite some sales, Berkshire Hathaway still has a large position in BYD due to its attractive stock price. The stock has only achieved a plus of 9.9% since January 1st, and BYD has announced that it is lowering the prices of its vehicles. The idea behind it is to increase turnover, potentially at the expense of competitor Tesla, who had previously lowered their prices. BYD works with a higher gross margin than Tesla, giving them more flexibility. The currently estimated P/E ratio is less than 20 and analysts have estimated a target price of more than 40 euros.