BYD Stock Up Due To Rising Electric Car Expectations
MAR 2 2015 BY MARK KANE
There were a lot of comments put on the BYD stock situation after a big price dropa few weeks ago.
In the meantime, BYD is selling its BYD Electronic Components to get $370 million for further developments of plug-in cars (New Energy Vehicles (NEV).
Price of shares recovered partially and now some sources are indicating that it’s a good time to buy some stock in BYD.
“Nomura International (Hong Kong) has given BYD a “buy” rating and lifting a target stock price to 64 Hong Kong dollars, 90% higher than the current price. The company’s stock price rose by nearly 40% in the four days through Feb. 17.
A mounting air-pollution problem has prompted the Chinese government to tighten restrictions on car sales. Also, Beijing announced Feb. 16 that it will provide technical support aimed at increasing the number of eco-cars in the country to 5 million by 2020.
Despite the positive market buzz surrounding BYD, some market watchers remain cautious. Linus Yip, chief strategist at First Shanghai Securities, said he wants to get a clearer picture about the growth prospects for BYD’s electric-car business. He predicted the company’s stock price will peak at between HK$35 and HK$40.
BYD said it expects its net profit to decline by up to 22% on the year for the year ended December 2014. Some market experts are saying the company’s recent stock price rally is being driven more by wishful thinking than reality, as eco-cars are not catching on as quickly as expected in China.”
BYD shares have a history of ups and downs and are now sitting somewhere in the middle.
As BYD is probably the largest manufacturer of full-size plug-in cars and buses in China, which could become the largest market for plug-ins in the world, our focus is on sales and BYD is showing strong growth in this area, especially with its Qin PHEV.
Will BYD be able to increase plug-in sales (and production) every year from here on out to reach a high volume? We will see.