BYD founder Yang Longzhong exits after A share sale
BYD said Yang Longzhong, one of the company's founders, had resigned with immediate effect, dealing a blow to the mainland maker of cars and batteries in which legendary investor Warren Buffett holds a stake through his Berkshire Hathaway.
Yang's resignation as vice-president follows mounting speculation that he might quit after selling 8.43 million BYD A shares on the Shenzhen exchange for 119 million yuan (HK$145.51 million) in July. News of his exit came after brokerage CLSA slashed its target price on BYD by 94 per cent on Tuesday over worries about a decline in BYD's business.
Shares of BYD started trading on the Shenzhen exchange in June 2011, after the company raised 1.42 billion yuan in an initial public offering. That followed a listing in Hong Kong in 2002, when BYD raised HK$1.64 billion.
In July, six key BYD executives, including Yang, sold a combined 13 million A shares on the Shenzhen exchange for a total of 184.3 million yuan, according to data from the exchange. Their share disposals come after a total of 477 million shares, or one-fifth of the company's share capital, became tradeable on the expiration of a 12-month lock-up period that followed the Shenzhen debut.
But, analysts worry that the quick move by key executives to cash in signals more officials might leave the company.
CLSA lowered its 12-month per-share price forecast for the Hong Kong listed shares to just 41 HK cents, from a previous estimate of HK$7.40. The move sent the price of BYD shares down 9.8 per cent in Wednesday trading.
In yesterday's announcement to the Hong Kong stock exchange, BYD chairman Wang Chuanfu said Yang's resignation was due to "restructuring of the company's business and for personal reasons".
Yang, 47, is also the general manager of the sales and marketing division and a director of the BYD Charity Foundation.
BYD shares rebounded 1.65 per cent to HK$13.48 yesterday in a firmer overall market.
Last month, BYD reported a 94 per cent drop in first-half earnings, underperforming most of its rivals as sales sagged and its solar energy business lost money. The outlook remains challenging as the mainland car market, the world's largest, is experiencing sluggish growth, and the solar panel-making operation is under pressure from a euro-zone crisis that has sapped global demand.