Warren Buffett Sells BYD Shares for First Time, Cashing in Over HK$358M

On August 30, the HKEx (Hong Kong Stock Exchange) News website showed that Warren Buffett’s Berkshire Hathaway Corporation had sold 1.33 million BYD shares on August 24 at an average price of HK$277.1 ($35.31) per share. Its stake dropped to 19.92%, and the total number of shares it held after the reduction was 219 million, with the market value of its holdings reaching HK$57.597 billion.

Regarding this, domestic media contacted BYD’s investor relations department as an investor and the company staff said, “We only knew after seeing the news.” Regarding the various speculations in the market, the above-mentioned people said that “There is no need to over-interpret. BYD has not disclosed any major events recently, and the company’s operations are all normal.”

Buffett bought 225 million BYD shares in September 2008 at HK$8 per share, for a total price of $1.8 billion, accounting for 9.89% of the enlarged share capital. Data from Wind show that, with BYD’s closing price of HK$263 per share on August 30, Buffett’s investment return reached 31.88 times.

Warren Buffett, American business magnate, the chairman and CEO of Berkshire Hathaway (Source: Varchev)

Earlier, according to data from the HKEx, Citibank’s holding in BYD increased by 225 million shares to 389 million shares on July 11. Citibank has 225 million shares, equal to those held by Buffett.

SEE ALSO: BYD Denies Warren Buffett’s Share Reduction

Therefore, the market has speculated that Citibank’s new 225 million BYD shares came from Buffett’s Berkshire Hathaway. Affected by the market reports, on July 12, BYD shares fell more than 12% in intraday trading, and BYD’s A shares also closed down 4.72% on the same day.

At that time, a relevant person in charge of BYD told China Securities Journal that according to the relevant rules of the HKEx and the China Securities Regulatory Commission, major shareholders need to declare their rights and interests when reducing their holdings, and consult the rights and interests disclosure platform of the Hong Kong Stock Exchange. No information on the reduction is displayed, and the declaration of shareholders’ rights and interests shall prevail. At present, the company is operating normally, and all businesses are carried out in an orderly manner, the individual claimed.

It is worth noting that this sale is also the first time that Buffett has sold the firm’s shares in the 14 years that he has held them. Based on the average price of HK$277.1/share, Buffett has reduced his holdings by 1.33 million shares, cashing in more than HK$358 million.

Analysts believe that Buffett’s shareholding in BYD has attracted much attention from the market. First, some investors regard his investment as a “wind vane.” Second, Buffett has a high shareholding ratio, which does not rule out that he will still reduce his holdings in the future or affect the stock price trend.

On August 29, BYD disclosed its earning results for the first half of the year, showing operations income of about 150.607 billion yuan ($21.8 billion), a year-on-year increase of 65.71%. The net profit attributed to parent company owner’s was 3.595 billion yuan, a year-on-year increase of 206.35%. Both revenue and net profit reached new highs than the same period over the previous years, and net profit attributed to parent company owner’s was higher than last year’s full-year result.

During H1, BYD produced 647,914 new energy vehicles, up 312.18% year-on-year, and sold 641,350 vehicles, up 314.90% year-on-year, setting a record high. Its market share of NEVs reached 24.7%, up over 7.5% from 2021.