JP Morgan Keeps HK$600 Price Target on BYD
JP Morgan analyst Nick Lai reiterated on May 27, 2025, the price target of HK$600 on BYD’s Hong Kong-listed shares and an ‘Overweight’ rating on the stock.
“Start of another round of price war?
BYD’s share price pulled back by near 9% today (vs the HSCEI down 2%), while a few Chinese OEMs who have recently enjoyed stock rallies also saw a similar pullback (e.g. Geely -9%, Leapmotor -8%).
We believe potential factors to share price correction include 1) profit taking, given BYD as well as Geely, Leapmotor had appreciated by ~20-24% since April until last week vs. HSCEI up 1%) and 2) BYD’s unanticipated price cuts across main models over the last weekend (Table 1), which triggers investor concern of worsening pricing environment in the auto market and whether BYD can truly deliver its chairman’s guidance of sustained profitability of Rmb10k this year (click here for our chairman NDR takeaway note).
Our take on BYD’s unexpected price cut and implications for the broader market below:
A new price campaign for June
BYD announced last Friday May 23 a new promotional campaign that covers different variations of models under “Ocean” and “Dynasty” series.
Altogether, different trims of 21 models under these two series will see 15-30% price reduction versus MSRP in June.
Nonetheless, we note BYD had already offered -10-15% discounts on these models; hence, the effective discount or additional incentive would be ~5-15% for June.
We estimate 60-70% of models under the Ocean and Dynasty series will see a higher level of price incentive from now toward end-June.
Why the cut and why now?
We see four potential reasons:
- BYD is responding to a few select foreign OEMs aggressive pricing after the recent Shanghai Auto Show; for instance, Nissan launched its new “N7” BEV sedan that’s priced at only Rmb120-150k despite being a large C-segment sedan.
- BYD is aiming to meet its quarterly delivery target (JPMe 1.2mn units, up 20% QoQ from 1.0mn in 1Q25). Do note that BYD has set a full-year volume guidance of 5.5mn units. Our forecast is the company’s quarterly delivery will ramp up progressively along with new launches after the Shanghai Auto Show, hitting -1.4mn units in 3Q25 and a record high of 1.8-1.9mn in 4Q25.
- BYD’s channel inventory narrowed in April, to ~1.6 months from 2.5 months in March. This is similar to the broader PV market of 1.4-1.5 months by April (Figures 1-2). A contained inventory allows OEMs to push more volume before the slower season in July/ Aug.
- Consumer sentiment may remain weak, especially in the low end mass segment where customers want BYD’s new assisted driving features (i.e. God-eye highway autopilot) but don’t want to pay for it.”
This research note is reproduced verbatim from the issuing firm. Price Target never edits, paraphrases or alters analysts’ words — we only republish them in one place.
