Bernstein has initiated coverage of Chinese automaker, BYD Co (HK:1211) with an Outperform rating and set a 12-month price target of HK$359.00 on the stock.

Bernstein anticipates that the Asian automotive giant will experience a compound annual CAGR of approximately 33% through 2025, surpassing the growth rates of both China and the global electric vehicle (EV) market, which are estimated to be around 26-27%.

Analysts at the firm predict that BYD will expand its market share in China in the short term by tapping into the untapped mass market. Additionally, BYD has recently gained momentum in the premium segment with the Denza brand. Looking ahead, they envision significant opportunities in the overseas market in the medium term. It is projected that premium brands and international sales will together account for approximately 20% of the total sales volume and approximately 30% of the revenue mix by 2025.

“China has long dreamed of having its very own national champion in the auto sector, and BYD is turning that into reality.” the analysts write.

BYD is in a strong position to tap into the global market for its next growth phase. With the cost advantages it has gained domestically and its competitive pricing for EVs, BYD is expanding its market share abroad. In the near future, Bernstein expects to see increased contributions from Oceania, ASEAN, and the Middle East, followed by a more substantial presence in Europe over the medium term.