Earlier, BYD’s first two large financings were in the A-share market. In April 2011, it announced that it was about to have an A-share IPO, and in early June 2015, it announced its A-share refinancing plan. The timing of the selection is “just right”. After the announcement of the company’s relevant board resolutions, the A-share market has undergone in-depth adjustments.
On September 5, BYD’s H shares once fell below HK$213, a drop of more than 5%.
Buffett reduces his holdings by about 5 billion Hong Kong dollars
According to the documents of the Hong Kong Stock Exchange, Berkshire Hathaway, a subsidiary of Buffett, sold 1.33 million shares of BYD on August 24, with an average reduction price of HK $ 277.1, and cashed out HK $ 369 million; on September 1, Berk Hill Hathaway sold 1.716 million shares again, with an average reduction price of HK$262.7, and cashed out over HK$450 million.
In addition to the details of the above-mentioned two reductions, the details of Buffett’s multiple reductions have not been disclosed; on September 1, Buffett’s cumulative reduction of nearly 18 million shares of BYD, the total number of shares held by August 11 fell from 225 million shares to 2.07 100 million shares, and the shareholding ratio of H shares has dropped to 18.87%. If the average price of the reduction is about 270 Hong Kong dollars, Buffett has cashed out about 5 billion Hong Kong dollars in total.
BYD’s sales of new energy vehicles in August were 174,900 units, an increase of 155% year-on-year and 8% month-on-month, of which 5,092 were exported. From January to August 2022, the cumulative sales volume was 978,800 units, a year-on-year increase of 267%. However, the beautiful sales data did not prevent the stock price from continuing to fall.
In this regard, a private equity person who has cashed in new energy upstream stocks at a high level told the first financial reporter that in June 2022, many electric vehicle industry chain companies have intensive financing (BYD does not have equity financing at this stage), and the market has become hot. It is too high, and after the completion of the main financing projects, these companies have no much motivation to stabilize their stock prices. At present, the secondary market investment in the electric vehicle industry chain is not optimistic.
Refinancing time is “right”
On January 21, 2021, BYD announced that it will place 133 million H shares, and the total proceeds from the placement is expected to be approximately HK$30 billion. Enlarged by approximately 12.69% of the number of issued H shares, representing approximately 4.65% of the total number of enlarged issued shares after the allotment and issuance of the Placing Shares. The related placement was completed on January 28.
Less than a month after the completion, starting on February 18, 2021, the broader market experienced a deep adjustment. After more than a month of sharp adjustments, starting in April 2021, the A-share new energy sector has set sail again. In the context of the continued general decline of blue-chip stocks, the new energy sector peaked in November after 7 months of rising. This time BYD once again conducted H-share financing.
On November 1, 2021, BYD announced that after the market on October 29, BYD successfully completed the placement of 50 million new H shares at a price of HK$276.0 per share. After the 13.8 billion Hong Kong dollar flash placement of H shares, BYD will issue two Hong Kong shares in 2021, raising a total of about 44 billion Hong Kong dollars.
During 2021, senior executives and shareholders of BYD’s main shareholders have also reduced their holdings. BYD announced on May 29, 2021 that 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 his holdings at prices ranging from 250 yuan to 300 yuan several times within six months. On February 26, 2021, Li Ke, a senior executive, reduced his holdings by a total of 1 million shares, at a price of 195.77 yuan per share to 218.50 yuan per share. In addition, the main shareholder Rongjie Investment Holdings also reduced its holdings of BYD from September 2020 to January 2021, at a price range of 93.00 yuan/share to 262.66 yuan/share, with a total reduction of 7.5323 million shares, accounting for 0.415% of the total share capital .
If the A-share IPO in 2015 and the A-share IPO in 2011 are included, since Buffett’s HK$1.8 billion investment in 2008, BYD has raised four times in both AH-share markets, with a total financing amount of about 60 billion yuan.
Judging from the two financings of A-shares, BYD always announced before the end of the bull market, but because the various procedures are more complicated, the implementation is not as fast as that of Hong Kong stocks.
In March 2008, BYD announced plans to return to A-shares, but it was not finally determined by the board of directors until April 2011, and the A-share prospectus was not released until May. On the timeline, A shares have entered two years of continuous adjustment.
On May 9 of that year, BYD issued an announcement saying that the China Securities Regulatory Commission’s Issuance Examination Committee had reviewed and approved the application for A-share IPO. 2.2 billion yuan. On June 30, BYD was successfully listed on the Shenzhen Stock Exchange.
Look at the financing in 2015. BYD, which had been suspended from trading since May 25 of that year, disclosed a non-public offering plan on the evening of June 3. At the price of 57.40 yuan per share, BYD non-publicly issued no more than 261 million shares to no more than 10 specific objects, raising the total amount of funds. not more than 15 billion yuan. This financing was not finalized until July 2016.