Goldman Sachs maintains buy rating on BYD, citing revolutionary '10c' charging with Super E-Platform launch.

BYD shares rose over 3% in HK market, hitting new record high.

On Mar 17, BYD held the “Super E-Platform and Han L/Tang L Pre-sale” launch event, with focus on its 1000V BEV platform achieving “10C” charging efficiency. We believe the new platform is highly competitive given its best-in-class charging speed and 0-100km/h acceleration time: (1) Flash charging speed at 2km per second and 400km per 5mins, on par with ICEs; (2) Electric motor rotation speed at 30,511rpm, supporting max single motor power at 580kw, power-to-weight ratio at 16.4kW/g and 0-100km/h acceleration time at c.2 seconds.

At the same time, BYD launched two new flagship models Han L/Tang L EV equipped with the new technologies, with presale prices at Rmb270k-350k/Rmb280k-360k, which based on our product comparison analysis (Exhibit 3) is relatively high vs. other top-selling B/C segment sedans/SUVs in the market. Therefore, we expect relatively limited volume impact from these two models in the near-term, but watch out for future model launches with the Super E-Platform.

Key takeaways

Super E-Platform: BYD launched Super E-Platform, an upgraded version of the E-Platform 3.0 EVo launched in May 2024 with meaningful improvement in charging speed and electric motor. (1) Charging speed: Super E-Platform could support max charging voltage of 1000V (vs. 800V for E-Platform 3.0 Evo) and charging current of 1000A, driving max charging power of 1MW. According to the management, charging speed could reach 2km per second and 400km per 5mins, implying charging efficiency at “10C“, i.e. complete charging in 6 mins (1/10 hour), on par with ICEs. Management plans to build 4k+ 1MW flash charging piles to make the technology available nationwide. (2) Electric motor: The upgraded electric motor can achieve a rotation speed of 30,511rpm (vs. 23,000rpm for E-Platform 3.0 Evo), supporting max single motor power at 580kw, power-to-weight ratio at 16.4kW/kg and 0-100km/h acceleration time at c.2s.

Presale launch of Han L/Tang L EV: During the event, BYD announced presale of n its new flagship models equipping the new technologies, which will be officially launched in early-Apr: (1) Han L EV with pre-sale price range at Rmb270k-350k, a mid-to-large size sedan scoring similarly to Zeekr 007 with average LTM monthly sales volume at c.3k units; (2) Tang L EV with pre-sale price range at Rmb280k-360k, a mid-size SUV scoring similarly vs. AITO M7/Luxeed R7 EV with average LTM monthly sales volume at c.13k/11k units. Although the latest BEV technologies is highly competitive with best-in-class charging speed and 0-100km/h acceleration time, we believe pricing of Han L EV/Tang L EV is relatively high vs. other B/C segment sedans in the market, and Rmb90k/60k higher vs. Han EV/Tang EV, and therefore, expect limited volume contribution in the near-term.

Investment Thesis

BYD is a leading NEV maker both in China and globally. We believe the company is well-positioned both at home and abroad, capturing the largest mass-market demand and building up premium brands with supportive NEV policies in the domestic market. At the same time, BYD is starting to tap into the overseas market with compelling (highly competitive, innovative) products, which we expect could become a second growth driver for the company, contributing 23% of incremental vehicle sales volume in 2024-2030E. With a comprehensive product portfolio and strong in-house capabilities enabling continued vehicle technology innovation, we expect BYD to grow its total vehicle sales volume from 4.3mn in 2024 to 8.9mn in 2030E, capturing 1/3 of China’s NEV wholesale demand. BYD A/H shares are trading below their historical average 12m forward P/Es, which we view as attractive. We are Buy rated. Catalysts include strong sales, new supportive policies for the NEV industry, breakthrough in overseas markets, and quarterly results. Downside risks: (1) intensifying electric vehicle competition; (2) slower-than-expected overseas expansion progress; (3) lower-than-expected external battery sales.

Price Target Risks & Methodology

We are Buy rated with 12m DCF-based (WACC 10.8%, TGR 2.0%) TPs of Rmb443/HK$415 on the A/H shares (applying a 14% discount to the H-share). Downside risks: (1) Intensifying electric vehicle competition; (2) Slower-than-expected overseas expansion progress; (3) Lower-than-expected external battery sales.