Chinese electric vehicle (EV) and electronic components manufacturer, BYD (SZ:002594), saw its shares soar over 8% to HK$260.8 on Wednesday, marking the largest single-day gain this year and bringing the year-to-date gains to 35%, according to InvestingPro data.
This significant rise followed the company's projection of potentially doubling its third-quarter profit to between CNY9.55 billion ($1.31 billion) and CNY11.55 billion, a substantial increase from last year's CNY5.72 billion. The anticipated growth in profit is primarily driven by record sales.
In tandem with the surge in Hong Kong-listed shares, BYD's A shares in China also experienced a considerable uptick, rising by 5.46% to 251 yuan on Wednesday.
Analysts from HSBC and Nomura have maintained their buy rating on BYD, attributing their positive outlook to the company's strong product cycle, increased profitability potential, and a dominant 36.5% market share in China's EV retail sales. Reflecting their confidence in BYD's future performance, these analysts set target prices of HK$408 and HK$356 respectively for BYD shares.
InvestingPro Tips suggest that BYD has a high earnings quality, with free cash flow exceeding net income.
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