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Berkshire Hathaway: Warren Buffett increases BYD’s investment in China

Berkshire Hathaway: Warren Buffett increases BYD’s investment in China


Hong Kong
CNN business

Warren Buffett’s Berkshire Hathaway continues to unwind its long position in BYD, China’s largest domestic electric vehicle manufacturer and Tesla’s main rival, after holding out for 14 years.

A conglomerate of legendary investors It sold another 3.2 million shares of BYD in the Hong Kong listing

(I WILL)
last week, reducing its stake to 15.99%, a Introduction to the Hong Kong Stock Exchange showed on Tuesday. The sale was worth about $80 million.

It is Berkshire’s fifth major stock sale

(BERC)
among BYD shares disclosed since August, according to public records. The pace of sales has picked up significantly this month, with three transactions so far in November.

Berkshire did not disclose the reason for the sales. The company did not immediately respond to CNN Business’ request for comment.

Before the first deal was announced in August, Berkshire had held 225 million shares of BYD for 14 years.

The US conglomerate bought BYD shares on average of in 2008 with HK$8 ($1.02) each An investment of 230 million dollars. BYD’s stock then fell to a record low during the global financial crisis.

But the stock has risen significantly since then. In 2020, BYD’s Hong Kong-listed shares rose 437% as the company developed the “Blade Battery” and China’s EV market boomed.

The company says the blade-shaped battery is thinner and longer than lithium iron cells. As a result, it can maximize the use of space inside the battery pack. According to BYD, it is also less likely to catch fire even when badly damaged.

BYD has already overtaken Tesla to become China’s best-selling EV brand. Last month, it sold 103,157 pure electric vehicles in China. By comparison, Tesla delivered 71,704 vehicles from its Chinese factory, according to data from the China Passenger Car Association.

At the end of June, BYD’s Hong Kong-listed shares hit a record high of HK$331.4 ($42). That was 41 times the price Berkshire paid 14 years ago.

Since the summer, Berkshire has been selling BYD shares. Based on the latest exchange filing, the conglomerate has dumped more than 49 million BYD shares in the past four months.

It’s unclear how much Berkshire made from the sale. But the average price per share in the five deals the company has disclosed since August was about HK$205 ($26).

Using that average, Berkshire made a net profit of $1.2 billion by offloading 49 million shares, assuming a purchase price of HK$8, according to a CNN Business estimate. The conglomerate’s stake in BYD is worth $3.9 billion, based on the latest share price.

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