BYD has been one of the companies on the market that I find extremely interesting. However, the Chinese company is already losing ground again on this Monday. The stock lost almost 2.2% and is in a small downward trend well below 25 euros. This is not surprising, as the e-vehicle markets are currently starting a price war. Nevertheless, in my opinion, you can remain confident with this stock.

BYD: Tesla lowers prices in China The news of the day comes from China. Tesla is apparently lowering its prices there, which can mean two things. On the one hand, Tesla is apparently willing to maintain or gain market share in China. On the other hand, Tesla’s pricing strategy also shows that the market is price-sensitive – or to put it more simply: prices play a bigger role.

BYD itself has already lowered prices in December – in response to Tesla’s previous price cuts. It is likely that a price war is currently being initiated, which may also affect the companies‘ revenues. It is possible that the margins of the companies will also be affected.

However, BYD not only has a strong hold on the market in China, but also increasingly in Europe. The Chinese company is now considered the number one player in the market, ahead of Tesla. Therefore, I do not consider the price war in a growing market to be of particularly high relevance.

BYD: Sentiment is better than the stock price There are still many analysts who assign BYD significantly rising prices and a high price target. This target, converted to euros, is around 36 euros. Based on current prices, this would be a potential increase of up to 54% for the stock. These estimates typically cover a period of up to 12 months.

However, the price forecasts have also been reduced. Just a few weeks ago, the price forecasts were at 42 euros or slightly higher. Nevertheless, the estimates are relatively credible. This is because BYD is currently valued at a P/E ratio of around 14-15 based on current estimates. This is relatively low compared to the company’s historical valuation. The P/S ratio is less than 1.

This means that the stock is cheap – from an economic perspective. However, the market trend looks weak – depending on the investment style, the stock is either interesting or uninteresting as a trading value.

BYD: Price war not dramatic – WKN: 710000 – ISIN: DE0007100000 Source: https://fundamental.aktienscreener.com/CNE100000296/05/byd-co-ltd/data