JPMorgan released a research report stating that a recent conference call with BYD COMPANY (01211) revealed three significant new positive surprises: better-than-expected domestic sales guidance, upside potential for overseas sales, and a notable profit improvement driven by new models. The firm set a price target of HK$120 and assigned an "Overweight" rating.

The report noted that BYD's management currently guides for domestic sales of 3.5 to 4 million vehicles this year, representing a year-on-year increase of 0% to 14%, depending on competitive dynamics in the Chinese market. This exceeds JPMorgan's forecast of 3.5 million units, which assumed flat year-on-year growth. Although the guidance range is wide, the bank believes it demonstrates management's growing confidence in order performance for new models featuring ultra-fast charging technology launched at the Beijing Auto Show.

Regarding overseas markets, while BYD reiterated its sales target of 1.5 million vehicles, a 50% year-on-year increase, management indicated there is potential for upward revision due to strong demand, especially following recent rises in oil prices. Management further emphasized that the company's own fleet of eight vessels is ready and will support this target.

The report pointed out that BYD's new models equipped with flash-charging technology are driving an improvement in the profitability of its domestic business, a factor that investors may not yet fully appreciate. The bank estimates that by the fourth quarter of 2026, over 30% of domestic sales will come from new models, most priced above 200,000 yuan. This compares to approximately 70% of sales in 2025 being concentrated in price segments below 150,000 yuan. According to the bank's estimates, all else being equal, the average selling price or per-vehicle profit contribution could increase by more than 5,000 yuan, serving as an effective measure to mitigate cost inflation and price competition.