BYD Company Ltd. (BYDDY) isn’t a household name, at least not in the US. But it’s no spring chicken. Founded in 2003 by Wang Chuanfu, BYD (which stands for “Build Your Dreams”) has long been one of China’s top automakers, writes Chris Preston, chief analyst at Cabot Value Investor.
What really sent its sales into hyperdrive, however, was when it made the switch to all battery electric and hybrid plug-in vehicles in 2022. Revenues instantly tripled, going from $22.7 billion in 2020 (a record, despite the pandemic) to $63 billion in 2022.
In 2023, sales improved another 35% to $85 billion. In 2024, it was on track for $106.4 billion, or 25% growth, with another 20% growth expected in 2025.
But there’s even greater upside. Right now, BYD does roughly 90% of its business in China, accounting for one-third of the country’s total sales of EVs and hybrids this year. The company is trying to change that, recently opening its full-assembly plant outside of China, with a new plant in Thailand starting deliveries.
A plant in Uzbekistan puts together partially assembled vehicles. A plant in Brazil is expected to open early in 2025. And BYD has plans to open more new plants in Cambodia, Hungary, Indonesia, Pakistan, and Turkey. Mexico and Vietnam are possible targets as well.
You’ll notice there are no plans to expand into the US. While BYD does have a minor presence here – it makes electric buses in California – it’s mostly staying out of America to avoid high tariffs and political conflict, two factors that will only ratchet up under a second Trump term.
So, while many Chinese stocks are saddled with the baggage of ongoing US-China turmoil, BYD isn’t. Even without the US market, it’s already the biggest EV and hybrid manufacturer in the world. And that’s from selling nine out of every 10 cars in China alone.
At 15.4x earnings estimates, BYDDY recently traded at less than 20% of its five-year average forward P/E ratio (89.6). And its price-to-sales (1.04) ratio was about half the normal five-year ratio. With a potentially monster quarter in the works (analysts are projecting 45.6% revenue growth), I think a swift bounce-back is in order.
For all of those reasons, BYDDY is my Top Pick for 2025, with a price target of $90 over the next 12 months – or 33% higher than the late-2024 price.
