Buffett’s Berkshire reports 2nd biggest BYD stake sale to take US$2.6 billion off the table in 6-month selling spree

The cutback on February 3 is the second biggest of nine publicly disclosed transactions since Berkshire began trimming its BYD stake in early August
The selling spree would have netted US$2.6 billion in total, based on those nine trades and other unreported sales, according to the Post’s calculations

Hong Kong stock market

Jiaxing Li

Published: 1:26pm, 10 Feb, 2023

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Warren Buffett’s Berkshire Hathaway continued to trim its stake in BYD, the world’s top-selling electric-vehicle (EV) manufacturer, taking its cumulative selldown to more than US$2.6 billion over the past six months.

The US investment firm sold 4.235 million Hong Kong-listed shares of the Chinese carmaker for about HK$1.09 billion (US$139 million), at an average price of HK$257.90 each, according to a stock exchange filing on Thursday. The February 3 sale lowered its stake to 11.87 per cent from 12.9 per cent.

The latest transaction is the second largest among nine publicly disclosed trades by the Omaha, Nebraska-based investor since August, following the sale of 5.78 million shares on November 8. Its ownership dropped to 130.3 million shares from 225 million shares which it first acquired during the 2008 global financial crisis.

BYD’s Seal is displayed at Tokyo Auto Salon 2023 on January 13, 2023. Photo: Reuters

BYD shares fell as much as 4.2 per cent to HK$239 on Friday, erasing more than HK$1o billion of its capitalisation in the Hong Kong market. It closed at HK$240.60, completing a 5.6 per cent loss for the week.

Berkshire’s selling spree, in the midst of a domestic price war and demand slowdown, would have raised more than HK$20.7 billion (US$2.6 billion) of proceeds, according to the Post’s calculations based on Berkshire’s public sales and estimated market price for its other unreported selldown.

Tesla rival Xpeng sparks all-out price war in China’s cutthroat EV sector

China’s new energy car sales, including pure battery EVs and plug-in hybrids, fell 6.3 per cent in January from a year earlier, according to data published by the China Passenger Car Association (CPCA). Most carmakers reported weaker volume, partly due to the weekly shutdown during the Lunar New Year holiday.

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Tesla owners in China protest against price cuts as consumers tighten budgets

China’s EV sales growth could slow to 20 per cent from the 90 per cent pace last year, as demand shrinks following the expiry of state subsidy on car purchases, according to Ming Hsun Lee, who oversees autos and industrial research for Greater China at Bank of America Securities.

“The domestic market is highly competitive now,” Lee said at a briefing in Hong Kong on Friday. Tesla’s price cuts in China have prompted major domestic rivals such as Nio and Xpeng to join a price war, which could hurt their profitability, he added.

BYD is seeking to expand its market in Europe after dominating the domestic market and outpacing Tesla in 2022 in terms of EV unit sales.