BYD Sinks as Buffett Trims Stake, Daiwa Predicts Full Exit
- Stake sale offsets impact from rising new energy vehicle sales
- Shares down 30% since Berkshire-sized stake appeared in CCASS
Traders offloaded more shares of BYD Co. on Monday after a second filing showed Warren Buffett’s Berkshire Hathaway Inc. had further trimmed its stake in the company.
The Chinese automaker’s stock dropped as much as 6.8% to the lowest level since May 10 in Hong Kong. The selloff extended the shares’ losses to almost 30% since a BYD stake that matched Berkshire’s stake appeared in Hong Kong’s clearing and settlement system in July.
Berkshire’s waning interest in the stock, coupled with the prospect of the firm’s eventual exit, has outweighed news that BYD is now the world’s second biggest electric-car battery supplier. A year-on-year surge in new-energy vehicle sales volume in August also failed to lift sentiment.
“We do expect Berkshire Hathaway to completely exit its position,” said Kelvin Lau, an analyst at Daiwa Capital Markets Hong Kong Ltd. “Even though we expect the fundamentals of the company to remain solid, we expect the stake sale from Berkshire Hathaway would impose near-term share-price pressure.”
Theories about Buffett’s plans for the bellwether Chinese electric car company have swirled since a 20.49% stake — identical to the size of Berkshire’s last reported BYD position in Hong Kong as of end-June — entered the Central Clearing and Settlement System in July.
Berkshire has now disposed of about 18 million BYD shares and it still holds an 18.87% stake, or about 207 million shares, as of last Thursday, according to a Hong Kong stock exchange filing.
Author: Jeanny Yu, Bloomberg