BYD STOCK - LONG TERM ELECTRIC VEHICLE INVESTING | Summary and Q&A

TL;DR

BYD, the largest global electric vehicle producer from China, presents an opportunity to invest in the growing electric vehicle trend while considering potential risks.

Key Insights

• 🍉 Markets often have a myopic attitude and only focus on short-term trends, providing opportunities for investors who can think ahead and find undervalued investments that align with longer-term trends.
• 🚙 The electric vehicle industry is expected to experience significant growth in the coming decades, with projections ranging from 25 to 100 times the current number of electric vehicles.
• 🚙 BYD, as the largest global electric vehicle producer, has the potential for future revenue growth, but investors should consider risks such as increased debt and competition from established car producers.
• 😨 Investing in new companies in the electric vehicle industry carries risks, as they may face challenges during economic downturns and heightened competition from other car producers.
• 🔬 The presence of Warren Buffett's investment in BYD does not guarantee its success, as he invested when the company was undervalued and in the midst of a recession.

Transcript

today fellow investors today we are going to analyze a company BYD the largest global electrical vehicle producer from China we're going to talk about how to position yourself into these long-term trends that we know that are about to happen but how to find investments that are low-risk and can lead to high rewards for example if you look at US hea... Read More

Questions & Answers

Q: What are some key long-term trends that investors should consider when looking for investment opportunities?

Investors should consider trends like the increase in the older population, improvements in healthcare, and the growing electric vehicle industry. These trends can provide high rewards if investments are made early and smartly.

Q: What are the expected growth projections for the electric vehicle industry?

Estimates from the International Energy Association suggest that by 2040, the number of electric vehicles could range from 50 million to 200 million. This represents potential growth of 25 to 100 times from the current number of two million electric vehicles.

Q: How is BYD positioned in the electric vehicle industry?

BYD is currently the largest global electric vehicle producer, with a focus on the Chinese market. While its sales are mainly in China, it has potential revenue growth from projects like the sky rail monorail. However, expanding globally would bring it into competition with other car producers in terms of margins.

Q: Why is BYD considered a risky investment?

The risks with investing in BYD include the company's increased debt and the potential for increased competition in the electric vehicle industry. Additionally, the automotive industry is known for tight margins, especially during recessions, which could impact profitability.

Summary & Key Takeaways

• BYD, a Chinese company focused on electric vehicle production, currently has 92% of its sales in China and has not expanded globally. However, it has other revenue streams such as handset and assembly services and rechargeable batteries.

• Despite subsidy cuts leading to lower revenue and net profit margin in 2017, BYD has historically raised its revenue and has the potential for further growth with projects like the sky rail monorail.

• While BYD's price earnings ratio may be high, it is still considered a profitable company. However, risks include increased debt and competition from established car producers.