Chinese EV giant BYD seeks US$3.9 billion from Hong Kong stock placement

Name: Behind the scenes at BYD Auto: China’s biggest electric vehicle factory
Uploaded: 2021-01-21T05:49:34.000Z
Duration: 1 min 47 s
Description: Behind the scenes at BYD Auto: China’s biggest electric vehicle factory

Company plans to place 133 million new shares at HK$225, or a 7.8 per cent discount on the closing price on Wednesday of its current stock

It will use the cash to replenish its working capital, repay interest bearing debt and invest in R&D

Reading Time:2 minutes

Why you can trust SCMP

BYD’s e5 EVs seen in Santiago, Chile this month. The company’s net gains from the share placement will amount to about HK$29.8 billion. Photo: Xinhua

Pearl Liu

Published: 1:49pm, 21 Jan 2021Updated: 10:46pm, 21 Jan 2021

BYD, China’s largest carmaker, plans to raise HK$29.9 billion (US$3.9 billion) from the sale of new shares in Hong Kong.

The electric vehicle (EV) maker, which is listed in Hong Kong as well as Shenzhen, said in a filing to the city’s stock exchange on Thursday that it plans to place 133 million new shares at HK$225, or a 7.8 per cent discount on the closing price on Wednesday of its current stock. The new shares will account for 14.5 per cent of its existing shares currently traded in Hong Kong, and 4.88 per cent of its total share capital.

“The company will achieve an accelerated replacement of fuel vehicles by new energy vehicles through technological innovation, as well as a leap from traditional vehicles to smart vehicles through its software and hardware enhancements in the field of automotive intelligence,” Shenzhen-based BYD said in its filing. “The company will continue to increase its production capacity of power batteries, and promote the output of Chinese power batteries to global carmakers.”

The share sale comes as Beijing pushes for more green vehicles on China’s roads. It wants one in every five new cars to be either purely electric, hybrid or fuel-cell powered by 2025, according to a development plan for new energy vehicles (NEVs) between this year and 2035. China is the world’s largest market for NEVs. Their sales defied a slump in consumption and depressed sentiment caused by the coronavirus pandemic to rise by 12 per cent to 1.2 million units last year.

BYD is also the world’s fourth-largest carmaker by market value, according to China Merchants Securities, and trails only Tesla, Toyota and Audi. Its shares rose by more than 430 per cent last year in Hong Kong, and by 330 per cent in Shenzhen.

01:47

Behind the scenes at BYD Auto: China’s biggest electric vehicle factory

Net gains from the share placement will amount to about HK$29.8 billion, and BYD plans to use the cash to replenish its working capital, repay interest bearing debt and invest in research and development, according to its filing.