As we all know, in 2008, Buffett subscribed 225 million shares of BYD in Hong Kong stocks at a price of 8 Hong Kong dollars per share. In the following 14 years, BYD has experienced ups and downs, but Buffett’s shareholding has remained unchanged. Today, Buffett’s return on investment in BYD has exceeded 30 times. If estimated at the average selling price of HK$277.1 this time, the “stock god” earned more than 33 times this time.
Before the release of BYD’s strong semi-annual report, Buffett carried out a reduction operation for the first time. In the context of such a hot new energy track, I wonder if Buffett will verify his famous saying this time, that others are fearful and I am greedy, and others are greedy and I am fearful.
It has long been rumored
As early as July 12, the market reported that Buffett was suspected of reducing his holdings of BYD. On the same day, CCASS data of the Hong Kong Stock Exchange showed that 225 million shares of BYD were transferred to Citibank on July 11. Since the number of shares that rolled over was exactly the same as Buffett’s holdings, the market speculated that Citibank’s increased stake came from Buffett’s Berkshire Hathaway.
In response, BYD Securities Affairs Department previously responded:
“The data I see now is that Buffett’s shareholding has not changed at present. His shareholding ratio is very large, and if it involves a share change, it will definitely be disclosed.”
According to the analysis of industry insiders, there is still such possibility: First, the current holding reduction process has not been completed, so the company has not seen relevant data yet; second, Buffett lent to hedge funds for short selling. However, the former is more likely. Andy Wong, fund manager at LW Asset Management Consultants Ltd. said:
“We think Buffett is more likely to consider selling BYD stock. We don’t think they need to lend the stock to other institutions to short it to earn interest.” “That’s not their trading style either.”
After the news came out, BYD’s stock price suffered a severe setback. On the same day, BYD’s A-share fell 4.72%, while BYD’s Hong Kong stock fell 11.93%.
In addition to Buffett, BYD’s suppliers and directors have also reduced their holdings before.
On June 10, Rongjie Co., Ltd., one of BYD’s suppliers, announced that Shenzhen Esto Technology Co., Ltd. (the person acting in concert with the director Mr. Zhang Shunxiang) plans to make an announcement within 6 months after 15 trading days from the date of disclosure of this announcement. Reduced holdings of 4,300 shares (accounting for 0.0017% of the total share capital) through centralized bidding. It is worth mentioning that Lv Xiangyang, the actual controller of Rongjie, is the vice chairman of BYD.
On May 29, 2021, BYD also announced that the company’s director Xia Zuoquan plans to reduce his holdings of no more than 12 million A shares, accounting for no more than 12.69% of the total number of A shares he holds and no more than 0.42% of the total share capital. . Subsequently, Xia Zuoquan reduced the price of BYD several times within six months between 250 yuan and 300 yuan.
Earlier, relevant data showed that as of February 26, 2021, executive Li Ke had reduced holdings by a total of 1 million shares, with a price range of 195.77 yuan per share to 218.50 yuan per share. In addition, the main shareholder Rongjie Investment Holdings will reduce its holdings of BYD from September 2020 to January 2021. The price range of the reduction is from 93.00 yuan per share to 262.66 yuan per share, with a total reduction of 7.5323 million shares, accounting for 0.415% of the total share capital.
The semi-annual report is eye-catching: Have a car to sell and make more money?
Falling into the shadow of the “stock god” reduction, BYD’s share price has been unspeakably strong recently. However, the strong semi-annual report that removed the hat of “increasing revenue without increasing profits” still greatly boosted market confidence.
BYD’s 2022H1 financial report shows that during the reporting period, the company achieved an operating income of 150.6 billion yuan, a year-on-year increase of 65.71%, a net profit attributable to the parent of 3.595 billion yuan, a year-on-year increase of 206.35%, and a non-net profit of 3.029 billion yuan, a year-on-year increase of 721.72%. And operating income hit a record high for the same period of the year.
In addition, for the first time in recent years, gross profit margin and net profit margin have both increased year-on-year, increasing by 0.75 and 0.62 percentage points to 13.51% and 2.61% respectively. Although the growth rate is not large, it is expected to end the unfavorable trend of continuous year-on-year decline.
Looking at the performance data of the second quarter alone, the company’s Q2 operating income was 83.78 billion yuan, a year-on-year increase of 67.92% and a month-on-month increase of 25.37%. The net profit attributable to the parent was 2.787 billion yuan, a year-on-year increase of 197.67%. Non-net profit was 2.515 billion yuan, a year-on-year increase of 458.6% and a month-on-month increase of 389%.
The research team of Wall Street News and Wisdom commented that after the year-on-year growth rate of net profit in BYD for three consecutive quarters in 2021 was negative, and even in the fourth quarter, it even turned negative month-on-month for the first time. Profitable hat seems to have ushered in a profit turning point.