A-shares in Warren Buffett-backed carmaker BYD Auto rose as much as 46 per cent on their trading debut in Shenzhen yesterday, despite the company announcing bleak first-quarter results the previous day.
BYD's A-shares finished up 41.4 per cent on its 18 yuan (HK$21.60) per share offer price, closing at 25.45 yuan apiece at the end of their first day of trading on Shenzhen's small and medium enterprises board.
The gains far exceeded movements in the Shenzhen-based auto and battery maker's Hong Kong traded H-shares since the A-share deal was priced.
BYD priced its sale of 79 million A-shares at 18 yuan apiece on June 19. Since then, the company's H-shares have risen only 17.5 per cent, adding 5.7 per cent yesterday to close at HK$25.15 per share.
Mainland stocks are permitted to trade freely only during their debut session, after which they are only allowed to rise or fall by 10 per cent per day.
BYD's Shenzhen offering raised 1.42 billion yuan, about 35 per cent less than the maximum 2.19 billion yuan it initially sought.
The cash injection comes as BYD struggled with slumping car sales and a heavier reliance on borrowings to bolster its cash flows. This has in turn burdened the carmaker with higher interest payments.