Morgan Stanley analyst Tim Hsiao maintained a Hold rating on BYD Co (BYDDF – Research Report) today and set a price target of HK$307.00.
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Tim Hsiao has given his Hold rating due to a combination of factors related to BYD Co’s strategic plans and market conditions. The potential establishment of BYD’s first electric vehicle factory in India is seen as a disruptive move, with the company aiming to capture a significant market share in a region that sold approximately 107,000 EV units last year. However, the success of this venture is contingent upon multiple factors, including the need for BYD to potentially partner with local Indian firms to mitigate political risks.
Additionally, the proposed capacity expansion, which involves a substantial investment of up to $10 billion over a seven-year period, is expected to be a gradual process. This phased approach could mean that the benefits of the investment may not be immediately realized, adding an element of uncertainty to the company’s future performance. These considerations, along with the competitive landscape and the need for local support, contribute to the Hold rating as the company navigates these complex dynamics.