written by reader BYD Company vs Tesla

By djhan454, March 18, 2015

Does anyone have an opinion on BYD Company? They seem to be in the news a lot lately. They recently partnered with Uber to use their EV’s in Chicago as a test site. It appears that they are the complete Green Company. They build the solar panels, they build the battery storage, and they build affordable EV’s. They’ve built model solar homes in Lancaster CA as well as building a factory there to make electric buses. It seems that they are everything that Elon Musk is trying to do only they do it under ONE company. BYD recently announce that they will out produce Elon’s gigafactory for the EV/home storage battery market. Warren Buffett has a 10% stake . Buffett just bought Duracell. I’m wondering if anyone else sees a connection. They also plan to bring their affordable EV stateside this year.Would value anyone’s opinion on this company.

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March 30, 2015 11:54 pm

BYD just finished a disappointing year, which the market had recognised in late 2014 and was fully revealed last week.
However, as always, the future is very bright! Sales of their K9 electric bus picked up well last year, and are forecast to further triple this year. Their small hybrid Qin vehicle is low cost and low margin, but saw sales rise twelvefold from a very small base: this is expected to further triple to about 40/- units this year. And they are launching a bigger SUV hybrid, which has had strong initial interest. But forecasts are for about 5,000 units this year. The e6 electric car has had low interest, maybe troubled by an understanding to acquire a connecting ‘pole’ for re-charging.
The above figures are based on conservative broker guides, since they have been disappointed by the company previously. The company itself is estimating sales at about 30% higher.
Meanwhile the solar business has been in the red in a very competitive market and might get to breakeven. The regular car business is also loss-making and will probably continue to be.
There is also a handset business which is not particularly exciting.
So there is quite a lot of businesses under this roof; the investment community is skeptical. If BYD can deliver strong sales particularly in its hybrids and buses, then it will have a strong year ahead and likely beyond. It is on a multiple of 50x if all goes modestly, as brokers a forecasting. Its high valuation is a legacy of its continuing innovation, Buffett investment and being a pioneer. Products will have to prove their genuine worth, so that the company will start to deliver in a way that is impressive and sustainable for a real investment.
Will update if I see any more meaningful analysis.