China’s New Energy Automobile Company-BYD’s Investment Value Analysis

As environmental pollution and energy shortage is increasingly serious in recent years, how to properly solve these two problems becomes a global consensus. The incomes of Chinese residents have risen up steadily, leading to new records in total amount of cars and in car numbers per thousand people. Since2009, China has become an international car empire whose productions and sales figures of cars remain top3years in a row. However, this inevitably has negative effects on the environment, such as exhaust gas pollution. Accordingly, a governmental policy called the12th Five-Years Plan on Electric Vehicles is carrying out. The plan emphasizes the importance on new energy automobile especially electric vehicles so that the environmental pollution and energy consumption can be reduced. In this broad scene, new energy car especially electric vehicle wins a golden opportunity to increase dramatically. This paper aims to deeply analyze BYD which leads the trend of electric vehicles in China and to evaluate the investment value of this company; meanwhile, this essay provides the author with significance of new energy vehicle by introducing its classification specifically; then, this article analyzes the market of new energy car in Japan, the US, as well as China, in order to define the prospects of industry on electric vehicle. When dealing with the analysis of investment value on BYD, this paper firstly focuses on its strategy especially the strategy distribution on new energy automobile, judging whether it is sustainable for the company. Secondly, the essay moves on to the core which not only balances the pros and cons of electric vehicles but also points out its opportunities and challenges. Lastly, this paper analyzes the investment value of BYD with a quantitative method by predicting the market scale of electric vehicles in2015and2021and by estimating the profit and EPS promotion brought by electric vehicle in different market situations.