(Yicai) March 14 -- Shares of BYD edged up modestly in Hong Kong after Citigroup raised its target price for the Chinese electric vehicle manufacturer to HKD463 (USD59), more than double the current price.

The Hong Kong-traded stock of BYD [HKG: 1211] closed 1.5 percent higher at HKD212.60 (USD27).

Citigroup upgraded its rating on the world's biggest seller of EVs to a "buy" in a report the New York-headquartered investment bank released yesterday.

The move could stimulate increased investor appetite for the stock that has been fluctuating in the past one and a half years since Warren Buffett started trimming his stake in the EV behemoth.

The Tesla rival is expected to have a heyday in sales as the markets of plug-in hybrids and range-extended EVs widen. BYD’s retail volume in the mainland is expected to recover to 280,000 units this month and the Shenzhen-based firm is predicted to sell a total of 320,000 units globally, per the report.

In the first quarter, BYD’s net profit per single car is forecast to be around CNY6,000 (USD834) and the sum should increase to CNY8,000 or CNY9,000 in the second quarter, the report added. The firm might improve its pre-tax profit margin quicker than its gross profit margin, referring to optimized operations for sharpened profitability.

Last year, BYD sold over three million vehicles, up 62 percent from the year before. Exports skyrocketed by more than four times to 242,800 units. The firm predicted in January that its net profit for last year could jump by 74 percent to 86 percent to a point between CNY29 billion and CNY31 billion (USD4.1 billion and USD4.4 billion) from 2022.

Chinese stocks linked to EVs are getting hot again as Morgan Stanley raised its target price for Contemporary Amperex Technology to CNY210 (USD29) on March 10, giving it an "overweight" rating and describing it as a "top pick." Just nine months ago, the American investment bank had downgraded the battery giant's rating to "underweight," citing increased performance risks linked to market share and profitability.

Meanwhile, Tesla is starting to look overvalued. UBS Group lowered its target price for the California-headquartered EV maker to USD165 from USD250 whereas Wells Fargo slashed the predicted price to USD125 from USD200.

Editor: Emmi Laine