Stock Commentary: BYDDF 🔋BLI, BLDE 🚁

1. BYD Company Limited (BYDDF)

Electric vehicles have been gaining investors’ attention recently as EV sales are picking up. In the month of August, BYD Company Limited (BYDDF) – Chinese EV automaker – sold 61,409 electric vehicles, more than 4 times the amount sold a year ago. Tesla has expanded their production capacity in China and their EV sales in China reached all-time high in August this year. Tesla is planning to grow their manufacturing capacity as quickly as possible with a 50% average annual growth rate in vehicle deliveries over a multi-year horizon.

In the latest quarter, Tesla reported revenue of USD11,958mn, an improvement of 98% yoy, while net profit (non-GAAP) improved to USD1,616mn (+258% yoy). This is also the first quarter Tesla reported net income of more than USD1bn. EPS increased to $1.45, a strong improvement of 230% yoy. The company’s strong improvement in earnings in 2Q21 was mainly driven by substantial growth in vehicle deliveries. Average selling price (ASP) fell slightly by 2% yoy as China-made vehicles make up a larger percentage of the company’s total deliveries mix in 2Q21. As Tesla beats consensus EPS estimates (actual EPS: $1.45 vs consensus EPS: $0.98), analysts have revised up the company’s expected EPS to $1.39 next quarter.

BYD is one of the largest electric vehicle makers in China but the company is facing heightened competition from other peers including NIO, Xpeng and Li Auto. Xpeng is launching PS5 model at an affordable price range with build-in autonomous driving system in the car. The company is expecting this model to be popular among the middle income group. Over 1.2m NEVs were delivered in the China market in 1H21, an improvement of 200% from a year earlier. As NEV sales in 2H21 are expected to remain robust, total sales have been revised to 2.4m this year, which is 33% higher than the earlier target of 1.8m.

NIO is selling more premium electric vehicle cars compared to its Chinese peers. Nio ES8 is priced at $67,783 (or 448,000 yuan) in the Chinese market.

Rystad Energy – an independent energy research company based in Norway – cited that rapid adoption of electric vehicles (EVs) will be the main cause for global oil demand to peak over the next five years. This is in line with Sinopec’s views that oil consumption in China is likely to peak in year 2026 at about 16mmbpd (current consumption in China is around 12mmbpd and current global oil consumption is approximately 96mmbpd). Governments worldwide are committed to achieve carbon neutrality and electric vehicles will be one of the solutions to achieve peak carbon emissions.

2. Berkeley Lights (BLI)

This week, BTIG reiterates a buy rating for Berkeley Lights’ technology.

Berkeley Lights (BLI), a life science tools company focused on the high-throughput phenotypic analysis of single cells, fell roughly 11% on this week after an anonymous short-selling report.

According to Mark Massaro, an analyst at BTIG, the report’s owner had little understanding of molecular biology relevant to the Berkeley Lights and maintained a $65 price target on BLI shares. BTIG customer checks have also found Berkeley Lights technology did provide major time savings which is vital to the growth in the field of cell therapy, synthetic biology and drug development.

Berkeley Lights have also signed new deals with Bayer, Thermo Fisher Scientific that should ease worries about the company’s outlook.

3. Blade (BLDE)

This week, Blade Air Mobility (BLDE), an urban air mobility platform, appreciated 21% after JP Morgan published an article that aerial ride-sharing market can be huge. Blade positive rating with JP Morgan’s price target at $16 puts Blade to be a potential Uber of the skies. IN addition, Blade’s acquisition of Trinity Air Medical, an organ logistics and transportation company for $23 Million provides Blade MediMobility to be the largest dedicated organ air transport arranger in the United States.

“Trinity’s long-term relationships with organ procurement organizations and transplant centers are a testament to their high-touchpoint approach to organ air transportation, providing seamless solutions for their clients, a perfect fit with Blade’s culture of 24/7 availability and mission redundancy,” said Rob Wiesenthal, Blade’s Chief Executive Officer.

Trinity is profitable and generated revenues of approximately $16 million in calendar year 2020, working with transplant centers and organ procurement organizations in 16 states

“Trinity’s end-to-end services integrate air missions with ground transport. Given the existence of landing pads at most hospitals today, we have the ability to immediately replace Trinity’s ambulances with helicopters on certain hospital-to-hospital missions, while preparing for a transition to both existing ‘last-mile’ cargo drones as well as Electric Vertical Aircraft, as soon as they become available.”