BYD: Goldman Sachs is becoming increasingly optimistic

After BYD announced last week that it would be installing God's Eye, a new, self-developed system with many new driver assistance systems, as standard in its entire vehicle range, the share price moved up a gear. Analysts see further upside potential.

Nick Lai of JPMorgan took BYD's good news flow as an opportunity to raise his price target for the share by 26 percent to 600 Hong Kong dollars or 74.00 euros.

"We believe investors will become increasingly convinced of BYD's long-term story, both in the domestic and international markets," analyst Lai wrote in his update on BYD.

"In our view, the company is taking the lead in order to beat domestic competitors in particular at an early stage," said DZ Bank analyst Matthias Volkert in his latest study on BYD. "We see good chances that BYD will further sharpen its competitive strategy with the included driver assistance system. Economies of scale and the vertical integration we mentioned in the past should continue to enable an adequate operating margin above FY23 (5.8%)," the analyst continued. His price target is 450 Hong Kong dollars.

Goldman Sachs also expressed a positive outlook on BYD's future. The analysts raised their net profit forecasts for the years 2024 to 2026 by 6 to 9 percent. Goldman Sachs assumes that BYD will also score points with increasing export rates. Foreign business is expected to become the Chinese company's second-largest growth driver and account for 34 percent of additional vehicle sales by 2030. The experts at Goldman Sachs raised the price target from 364 to 415 Hong Kong dollars.

Background: The new ADAS (God's Eye) system will be fitted as standard across the entire vehicle range in the future. The new driver assistance functions will even be fitted in most BYD small cars that are sold for under $10,000. The system includes an autopilot for navigation on the highway and automatic parking, among other things.

“This also increases the pressure on others to offer their own versions at little or no cost,” Chinese car blogger Tu Le told AKTIONÄR.

"The functions are nothing new, but rather well-known. The real highlight is the integration of the system for the lower end of the market. BYD is thus gaining market share in the New Energy Vehicles (NEV) segment and further expanding its cost advantages. BYD is thus becoming something of a monopolist in the NEV market," says car expert Ferdinand Dudenhöffer from the CAR Institute in Bochum to AKTIONÄR.