BYD General Manager Addresses Debt Concerns, Highlights Company's Financial Health

Li Yunfei pointed out that BYD's debt ratio is not as alarming as some of the international car manufacturers. He emphasized that BYD's total debt, when compared to other car companies such as Toyota and Volkswagen, is relatively manageable. This assertion is meant to calm concerns that BYD is facing financial difficulties similar to those faced by Evergrande. For instance, Ford has an 84% debt ratio, General Motors has a 76% debt ratio, and Apple has an 80% debt ratio. When it comes to total debt, Toyota has over 2.7 trillion yuan in debt and Volkswagen has over 3.4 trillion yuan, which dwarfs BYD's total debt.

Li Yunfei also highlighted the importance of considering interest-bearing debt as a critical metric for evaluating a company's financial health. He pointed out that BYD's interest-bearing debt of 286 billion yuan is significantly lower than that of other major car manufacturers, both domestic and international. This comparison aims to demonstrate that BYD's financial situation is healthier than portrayed by critics. Additionally, Li Yunfei addressed the criticism about BYD's reliance on supplier payments, explaining that a larger scale of operations and higher revenue naturally lead to larger procurement volumes and cooperation with suppliers. He argued that the key metric to consider is the proportion of accounts payable to total revenue, where a lower proportion indicates a healthier financial position.

BYD's accounts payable stood at 2440 billion yuan, but as a percentage of its revenue, it is lower than some of its peers. Moreover, Li Yunfei dismissed concerns over the payment cycle to suppliers by highlighting that BYD's average payment period is comparable to, if not more favorable than, some of its domestic competitors. For instance, both BYD and Geely have an average payment period of 127 days, which is more efficient than some other major Chinese car manufacturers.

The company's financial report for 2024 showed a record-breaking performance, with annual revenues of 777.1 billion yuan, net profits of 40.3 billion yuan, research and development investments of 54.2 billion yuan, and domestic tax payments of 51 billion yuan. Notably, BYD's cash reserves stood at an impressive 154.9 billion yuan. This stellar performance marks the company's best operational results in the past 30 years. Li Yunfei emphasized that any pessimistic views on the future of China's new energy vehicles are unwarranted, given the robust financial footing of BYD, which serves as a testament to the vitality and growth potential of the Chinese new energy vehicle sector.

The current state of the Chinese automotive industry is thriving, with unstoppable momentum. BYD, in particular, has seen explosive growth in numerous countries and key markets worldwide. Domestically, Chinese automotive brands continue to bolster their sales, with their market share now surpassing 60%. The penetration rate of new energy vehicles is steadily on the rise, with the purchase of such vehicles becoming increasingly mainstream. This trend signals a significant shift in consumer preferences, aligning with global efforts to reduce carbon emissions and promote sustainable transportation solutions. Li Yunfei's optimism is rooted in these statistics, suggesting a bright future for the industry, and underscoring his confidence in the prospects of BYD and the broader Chinese automotive industry.