Citi — BYD Company (1211.HK): September Inventory Tolerance and Wholesale Forecast
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Citi maintains its Buy rating on BYD's H-shares (1211.HK) with a HK$142.00 target price, derived from 1.2x 2026E PEG on a +25% 2026-28E net profit CAGR, implying 30x/25x 2026E/27E P/Es. With the stock at HK$79.85, Citi expects a 1.9% dividend yield and 79.7% total return; market cap is HK$728,008M (about US$92,826M). Citi estimates end-August inventory dipped 0.01 month MoM to normal levels. Assuming September exports rise 3% MoM and second-generation Blade Battery NEV shipments expand by 20,000 units MoM, inventory days can hold at 1.9 months, supporting a September total wholesale run-rate of 453,000 units (+4.6% MoM). That implies 3Q26 total sales of 1.30 million units (+19.2% QoQ), with exports of 565,000 (+20.0%) and domestic wholesale of 733,000 (+18.7%). Field checks show end-August 2026 dealer discounts in the UK, Australia and Brazil up 0.2-0.6ppt MoM with stable MSRPs: UK Atto 3 7.0% and Dolphin 6.7%; Australia 7.1% and 6.8%; Brazil 9.6% and 9.3%. BYD regaining domestic BEV share in August underpins the Buy. The A-share (002594.SZ) is rated 1 (Buy) with an Rmb131 target. Key risks: weaker NEV bus or passenger sales, a slower Skyrail ramp, another long-duration capex cycle and unexpected cash-flow issues.
Key exhibits
Exhibit 1
Exhibit 2
