Investment Value of an Enterprise in New Energy Vehicles: A Case Study of BYD Company

Abstract

Purpose – In recent years, new energy vehicles have undergone qualitative changes and witnessed a doubling of trading volume. Most of the existing research on new energy vehicles derive valuation methods from traditional automobile companies. This paper aims to establish an effective investment value analysis model and determine a reasonable investment range through comprehensive analysis of the internal and external environment of the company, so as to provide investors with more specific references for investment value. Design/Methodology/Approach – Based on value investment theory, this study compares several major domestic listed new energy vehicle companies and combines financial analysis and valuation methods. Taking BYD, a leading domestic automobile company, as an example, it analyzes the current investment value in the field of new energy vehicles to assist investors in making better investment judgments. Findings – This study comprehensively compares the financial status of BYD and several major new energy vehicle companies in terms of profitability, solvency, and development capability. Using the PE valuation method, the study concludes that in the short term, the valuation of listed companies in the new energy vehicle sector is generally too high, indicating a certain bubble, and investors should exercise caution. In the medium to long term, investors can sustain their focus. Research Implications – This study provides a comprehensive, objective, and rigorous research method for stock valuation by comparing financial data, PE, and PB. Investors should analyze the impact of changes in financial data, policy changes, and technological advancements on the valuation of investment enterprises. In the future, they can intervene within a reasonable valuation range to obtain greater returns with lower risks.