Download pdf
A Financial Analysis and Valuation of BYD
- 1 School of Economics and Management, Foshan University, Foshan, 528225, China
* Author to whom correspondence should be addressed.
Abstract
In the contemporary era, the depletion of traditional energy sources has become an increasingly pressing concern. In response, the development of new energy technologies has emerged as a pivotal strategy to alleviate energy shortages while aligning with ambitious carbon neutrality objectives. Understanding and properly assessing the financial landscape and risks faced by new energy enterprises are paramount for effective management and sustainable growth. This paper delves into this imperative by focusing on BYD, a prominent player in the new energy sector. Employing a comprehensive approach, this study begins with a SWOT qualitative analysis, dissecting BYD's strengths, weaknesses, opportunities, and threats. This analysis illuminates the nuanced landscape within which BYD operates, shedding light on both its potential and the challenges it must navigate. Subsequently, the study employs the Price/Earnings (P/E) model to assess BYD's valuation, providing quantitative insights into its financial standing and market positioning. Key findings from this research reveal a promising trajectory for BYD. Over the past two years, the company has demonstrated rapid growth in operating income, coupled with an enhanced debt repayment capacity, indicative of its robust developmental potential. However, the evaluation using the P/E model suggests that BYD's true value may be underestimated, hinting at further upside potential and market opportunities. This holistic examination underscores the importance of integrating qualitative and quantitative methodologies to comprehensively evaluate new energy enterprises, offering valuable insights for strategic decision-making and sustainable growth in the evolving energy landscape.
Keywords
New Energy Industries, SWOT Analysis, Corporate Valuation
[1]. Li, L. C. (2023). Research on Enterprise Valuation Issues from the Perspective of Business Model Innovation, Zhejiang Gongshang University.
[2]. BYD Official Website. (2023). BYD's "Blade Battery" Leads to New Heights of Safety for Global Power Batteries.
[3]. Guosheng Securities. (2023). 2023 BYD Research Report: Under the Support of New Energy Policies, the Penetration Rate of Pure Electric Vehicles Continues to Increase.
[4]. Yiche.com. (2021). As the Car Wave Flows - A Brief Discussion on the Advantages and Disadvantages of BYD's Development of New Energy.
[5]. Masiero, G., Ogasavara, M. H., Jussani, A. C., et al. (2016). Electric vehicles in China: BYD strategies and government subsidies. RAI Revista de Administração e Inovação, 13(1), 3-11.
[6]. DCD Lonlo. (2023). BYD: Challenges and Opportunities in the New Energy Vehicle Market.
[7]. Guanyan Report Network. (2021). Analysis of Opportunities and Threats in the New Energy Vehicle Industry: Broad Prospects Under the Trend of Low Carbonization, But Currently Facing Challenges.
[8]. Li, Z. (2023). Analysis of BYD based on Financial Data. Highlights in Business, Economics and Management, 10, 173-179.
[9]. Wang, Y. (2024). Research on Development Strategy of BYD's New Energy Vehicles. Northeast Petroleum University. DOI:10.26995/d.cnki.gdqsc.2023.000049.
[10]. Yan, Y. Z. (2022). Valuation and Risk Study of BYD Company. Advances in Applied Mathematics, 11, 8947.
Cite this article
Zhao,R. (2024). A Financial Analysis and Valuation of BYD. Advances in Economics, Management and Political Sciences,102,191-198.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
Disclaimer/Publisher's Note
The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
About volume
Volume title: Proceedings of ICEMGD 2024 Workshop: Decoupling Corporate Finance Implications of Firm Climate Action
© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and
conditions of the Creative Commons Attribution (CC BY) license. Authors who
publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons
Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this
series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published
version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial
publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and
during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See
Open access policy for details).