Warren Buffett, the stock god, liquidated his holdings in BYD.
On the evening of September 21st, foreign media reported that Warren Buffett's Berkshire Hathaway had completely divested its investment in BYD (02594.SZ; 01211.HK). According to statistics, BYD's stock price had risen by approximately 3,890% during the years Buffett held shares.
"A Berkshire spokesman confirmed that all BYD shares have indeed been sold," the report said.
BYD has not yet responded to Buffett's liquidation.
On September 26, 2008, at the urging of Munger, Buffett subscribed for 225 million BYD H shares at HK$8 per share through MidAmerican Energy, a subsidiary of Berkshire Hathaway. This represented approximately 10% of BYD's total shares after the placement, for a total transaction value of approximately HK$1.8 billion. Buffett's purchase of BYD's shares resulted in a price-to-earnings ratio of just 10.2 and a price-to-book ratio of 1.53.
For the next 14 years or so, Buffett continued to hold a large stake in BYD until 2022.
On August 30, 2022, the Hong Kong Stock Exchange website showed that Buffett's Berkshire Hathaway sold 1.33 million BYD H shares on August 24, 2022, at an average price of HK$277.1016, cashing in HK$369 million. It still held 218.719 million shares, and its proportion of issued voting rights dropped to 19.92%.
Since then, Buffett has reduced his holdings in BYD several times.
In July 2024, the Hong Kong Stock Exchange disclosed Berkshire's reduction of its holdings in BYD for the 16th time.
After this reduction, Berkshire Hathaway's stake in BYD has dropped to 4.94%. At the time, some analysts said that Buffett might be planning to sell off his holdings.
From its first divestment to its last disclosed divestment, Berkshire Hathaway reduced its holdings in BYD Hong Kong by approximately 171 million shares, reducing its holdings from 225 million to 54.2 million shares, and its stake from 20.04% to 4.94%. The average price of its divestments, as disclosed, ranged from a high of HK$277.1 per share to a low of HK$169.87.
According to Hong Kong Stock Exchange regulations, major shareholders only need to disclose increases or decreases in their holdings if they exceed a certain percentage. Buffett has reduced his holdings far more than 16 times.
In addition, according to the Hong Kong Stock Exchange regulations, shareholders holding less than 5% of the shares do not need to disclose their share reduction.
In a 2017 interview, Buffett discussed his decision to invest in BYD, saying Wang Chuanfu "has a lot of great ideas, and he's very good at turning them into reality."
He recalled: "Investing in BYD was not my decision, nor was it the decision of my investment team. Instead, one day Charlie Munger called me and said: We must invest in BYD, Wang Chuanfu is more powerful than Edison. I said, this is not enough to invest in BYD. Charlie said that Wang Chuanfu is a combination of Edison and BYD. I said, okay, your love for BYD is getting more and more enthusiastic, but it is not enough for me to invest. In any case, Charlie insisted on buying BYD."
In an interview in 2023, Buffett responded to the reduction of BYD holdings by saying, "We will find a better use for these funds."
According to the financial report, BYD achieved revenue of 371.28 billion yuan in the first half of the year, a year-on-year increase of 23.3%. Net profit attributable to shareholders of the listed company was 15.51 billion yuan, a year-on-year increase of 13.79%. In terms of sales, BYD sold 2.146 million vehicles in the first half of this year, compared to 1.613 million vehicles last year, a year-on-year increase of 33.04%.
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