Buffett’s Berkshire Hathaway cuts stake in world’s No 1 EV maker BYD again, selling 1.96 million shares for US$58.9 million

The share sale on May 2 has reduced Berkshire’s holding in Shenzhen-based BYD to 9.87 per cent from 10.05 per cent
Berkshire has disposed of over 110 million shares in BYD since August 24, according to public disclosures on Hong Kong stock exchange

Electric & new energy vehicles

Martin Choi

Published: 9:21pm, 8 May 2023

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Berkshire Hathaway, the investment firm controlled by US billionaire Warren Buffett, has continued to trim its stake in BYD, selling 1.96 million shares in the Chinese electric-vehicle (EV) maker, in at least the 11th reduction since August.

The shares were sold for HK$462.1 million (US$58.9 million) on May 2 at an average price of HK$235.64 per share, according to exchange data.

After the divestment, the Omaha, Nebraska-based investment firm’s interest in BYD dropped to 9.87 per cent from 10.05 per cent. This compared with 19.92 per cent when Berkshire began trimming its exposure in August.

BYD’s shares rose 2.1 per cent to HK$240 on Monday in Hong Kong, while its Shenzhen-listed shares gained 1.6 per cent to 254.03 yuan. Despite the gain, its Hong Kong-traded stock has slumped 27.6 per cent from the record close of HK$331.40 on June 28 last year. The stock had surged sixfold over the preceding two years.

Berkshire had a starting position of 225 million shares in BYD at HK$8 a piece, a stake built from scratch in the aftermath of the 2008 global financial crisis, earning an around 30-fold return over a 14-year holding period.

The US firm began selling down its shares from August 2022, according to stock exchange filings. Berkshire has disposed of over 110 million shares in BYD since August 24, according to public disclosures on the Hong Kong stock exchange.

BYD, the world’s largest EV marker, more than tripled its 2022 vehicle sales to 1.86 million units, most of them in China. The Hong Kong and Shenzhen-listed carmaker’s sales of pure electric and plug-in hybrid cars started to climb in the second quarter of 2022, helping it dethrone Tesla as the world’s largest EV firm.

Founded by Chinese billionaire Wang Chuanfu in 1995, Shenzhen-based BYD has been making vehicles since 2003.

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BYD mainly sells cars in mainland China, but is looking to become a global player with plans to expand in some overseas markets.

At Berkshire’s annual meeting on Saturday, investment tycoon Warren Buffett said that he was more comfortable with the investment firm deploying capital in Japan than Taiwan, reflecting the growing tensions between the United States and mainland China.

The billionaire investor contrasted Berkshire’s recently increased investments in five Japanese trading houses with its recent U-turn on a multibillion-dollar investment in semiconductor giant Taiwan Semiconductor Manufacturing Co (TSMC).

Berkshire invested more than US$4 billion in TSMC last year, only to sell most of it within three months. Tensions between the US and China have simmered in recent months, with some investors worried that mainland China might invade Taiwan.

Meanwhile, Berkshire revealed last month it had increased its stakes in Itochu Corp, Marubeni Corp, Mitsubishi Corp, Mitsui & Co and Sumitomo Corp to 7.4 per cent, and Buffett said his company might buy more.