BYD 1211

[winston]

Not vested

BYD plans Shenzhen listing in H2

Aug. 24, 2010 (China Knowledge) - BYD Co<1211>, China's largest rechargeable battery maker and a well-known automobile producer, yesterday said that it hopes to list on the Shenzhen Stock Exchange in the second half of this year, sources reported.

Last month, BYD said that it was seeking approval from its shareholders to extend the deadline of its planned Shenzhen-listing by twelve months to Sep. 7, 2011, added BYD's shareholders were scheduled to vote the application on Aug. 30.

BYD has said it planned to raise RMB 2.85 billion by floating up to 100 million A shares on the Shenzhen Stock Exchange.

Proceeds form the IPO would be used to fund its battery, automobile and auto part projects.

Wang Chuanfu, BYD's chairman, yesterday said that the company plans to release electric vehicle products in the U.S. market later this year. BYD is weighting the possibility to launch home appliance products, but is yet to make any decisions, he added.

On Sunday, BYD announced that it realized RMB 2.42 billion in net profit for the first half of this year, over 100% more than the RMB 1.18 billion realized in the same period of last year, due to a robust increase in car sales subsidized by government.

MidAmerican Energy Holdings Co, a subsidiary of Warren Buffett's Berkshire Hathaway Inc, holds a 10% in BYD.


Source: China Knowledge

[winston]

Seven BYD factories in central China ordered shut
Thursday, October 14, 2010

BYD Co (1211), the carmaker part-owned by billionaire Warren Buffett's Berkshire Hathaway, was fined and ordered to surrender seven factories after a dispute over land use in central China.

BYD received a 2.95 million yuan (HK$3.43 million) fine and will have the factories in Xian, Shaanxi province, confiscated, the Ministry of Land and Resources said yesterday.

BYD built the Xian plants even though 92 percent of the land they occupied was still zoned for agriculture, the ministry said. A spokesman said BYD will follow the order, which will not hurt operations. The firm said separately yesterday that its car sales in September fell 25 percent, even as deliveries rose at rivals.

"This [surrender order] will affect BYD's capacity expansion in the medium to long term," said Yu Bing at Pingan Securities in Shanghai. The stock fell 0.70 percent to HK$56.50.

Source: BLOOMBERG

http://www.thestandard.com.hk/news_deta ... 01014&fc=7

[winston]

Not vested

UNAUDITED RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2010

• Turnover amounted to approximately RMB34,502 million, increasing by approximately 30.88% compared with that of the same period last year

• Gross profit amounted to approximately RMB6,702 million, increasing by approximately 21.34% compared with that of the same period last year

• Profit attributable to equity holders of the parent amounted to approximately RMB2,433 million, increasing by approximately 4.02% compared with that of the same period last year

• Earnings per share amounted to approximately RMB1.07, decreasing by approximately 3.60% compared with that of the same period last year

http://www.hkexnews.hk/listedco/listcon ... 026011.pdf

[winston]

Not vested

BYD's auto sales drops 13% in Oct

Nov. 5, 2010 (China Knowledge) - BYD Co<1211>, China's largest rechargeable battery maker and a well-known automobile producer, has announced that its auto sales in October fell 13% year on year to 40,578 units.

However, the October figure was 23% more than the 33,085 units it recorded in September, boosted by rising demand in peak season.

In October, the company sold 18,715 F3 cars and 13,981 F0 cars.

In the first ten months of this year, the company's auto sales totaled 426,800 units, accounting for 71% of its target of 600,000 units for this year.

The company's net profit for the third quarter slid to RMB 11.82 million from RMB 1.16 billion in the same period of 2009, due to weak sales. In the first three quarters of this year, the company's net profit rose 4.02% year on year to RMB 2.43 billion.


Source: China Knowledge

[profittaker]

*DJ BYD Co Target Cut To HK$39.30 Vs HK$44.20 By Deutsche Bank
2010-12-10 08:28:00

[profittaker]

http://finance.qq.com/a/20101222/004302.htm
December 22, 2010 General Agencies Ltd economy Lin Jiaheng

比亚迪开始正视现实
上周末(18日)比亚迪公司(01211)发表了今年的汽车产销量再度悲观的预期,表示较早前公司将今年产销目标由80万辆下调至60万辆并不足够,但是应该可以保持在50万辆以上。这个论调,刚好和笔者在今年10月27日的《比亚迪梦幻终结要止蚀》文章内容相符合。当时笔者认为比亚迪下调的数字仍属偏高,并预期最终的数字应在45万辆至53万辆之间,股价目标是35至40元的水平。笔者现今仍是保持此种预测。事实上,中国汽车销量最佳的季节「九金十银」时间已过去,短期不宜对汽车股过份憧憬,要待明年才可以重新分析及部署入市策略。（恒丰证券研究部董事 林家亨）

Translate by Google
BYD began to face the reality
Last weekend (18) BYD Company (01211) published again this year, car production and sales of pessimistic expectations, the company said earlier this year sales target from 800,000 down to 600,000 is not enough, but should be able to maintained at 50 million or more. This argument, just, and the author October 27 this year, the " BYD dream end to stop-loss "consistent content of the article. At that time I believe that BYD reduced the number remained high, and the final figure is expected to be in the 450,000 to 530,000 between the target price is 35-40 yuan level. Today I still maintain such predictions. In fact, the best season of car sales in China, "nine gold ten silver" Time has passed, not on the auto sector over the short term vision, we must wait until next year before they can re-enter the market strategy analysis and deployment. (Director of Research Department of Prudential Securities Lin Jiaheng)

[profittaker]

what I like about BYD is their product focus. Contrast with other Auto Maker such as Renault (tie up with Nissan-NEC and Better Place), BYD focus on bus and taxi which is heavier road users than household passenger car. BYD may have easier access to Chinese market, the fastest growing in the world now.

What I don't like about BYD is lack of strategic collaboration with other companies. Green car itself big industry, from infrastructure, car to batteries, execution and production. Is it not impossible to make everything by 1 company, but it may take longer or make more mistake compared with well focus companies doing in partnership.

[profittaker]

THOUGHTS ON BYD.

Byd is equivalent to Wang ChuanFu, strength in the company are as follows:

1.) Strategically select focus area to innovate and leverage features from existing product on less important area. BYD do genuine R&D on important area and reverse engineering on less important area. It is a whole concept of pricing strategy in making itself in better position of pricing power. For instance, in making EV, BYD leverage knowledge on battery and focus R&D on drive, while the rest component of the car is reverse engineered from competitors.

2.) Holding the key to new product, such as battery for EV is the first competitive advantage. Second competitive advantage is BYD try make everything in house giving them pricing power or extra profits. However, we have to note that economy of scale is a double edge sword. If company start to cut down on cost it shows something bad is brewing.

3.) The above innovation strategy give BYD advantage in pricing power and move towards model of veticle integration. It gives a very bright future, nice dream in what the company would become. But as ant size grow to elephant size, it becomes harder to move and every move becomes a big adjustment which may affect how the Market react to the share price.

4.) For now, BYD profit component is moving from internal combustion car to green business; including EV car, EV bus, DM car, grid storage and charging stations. Internal combustion car is contributing 55% of profits. And BYD still need these profits for expansion, building factories, inventory stock, operating fund and etc. That is why disappointing Q3 has drag the price down by 50%, but price is still sitting at 300% gain from 2009. Then Market spread rumors on shortage of fund and etc.

5.) BYD strategy for 2011.
- Continue to sell internal combustion car
- Promote and sell DM (EV+HEV)
- Promote and sell EV bus and Taxi
- Promote and build storage grid

not vested, still reading more. Tricky part is what price is right?

[profittaker]

I have read contradicting information on BYD manufacturing manual vs auto. Some said, high labour usage is key to BYD low cost manufacturing. BYD has denied this but never show any prove.

There is 2 piece of info which I find interesting:
- Wang bought order an fully automated production line from Sanyo in early days. He reserver engineered and make the same production line at a faction of the cost. So, I guess they do have some kind of automation.
- Wang has stressed BYD has not made any recall in the past which is a evident to their quality.

Other than cheap labour, some also said BYD copy cats way of 'R&D'. Foxconn who used to compete business with BYD for electronics manufacturing business, has criticize BYD repeatedly in front of media.

I hold the view that BYD do selective innovation, focusing on key area for product technology, while other less critical area are reversed engineered (copy cat) from competitors.

A very interesting article.
That is why domain knowledge is always key in looking at investment opportunities. Not just venture capital or private equity opportunities.
Macro picture is rosy, but micro evaluation requires strong domain knowledge looking into details and that makes a difference between a good and lousy research. Unfortunately most research out there are rubbish !

A Look Inside Buffett's Battery Bet
Asian Wall Street Journal, 11 December 2009
By MATTHEW FORNEY AND ARTHUR KROEBER

BYD reverted to manual assembly lines with inexpensive labor. The result was cheaply produced batteries of inconsistent quality. Although the company can rightly be proud that it has never faced a battery recall, it scraps 15-30% of its batteries because they fail to meet quality standards—far above the industry average of under 5%, according to German consultancy Roland Berger.

Inconsistent quality is a small problem when making mobile-phone batteries of one cell each: You simply scrap the batteries that don't make the grade. But it's an enormous problem for electric-car batteries, in which hundreds of cells, each the size of a pack of cigarettes, must charge and discharge with exact precision. A car battery works only as well as its worst cell. It is far from clear that BYD's labor-intensive process can achieve the uniformity of quality required for electric car batteries.

BYD has yet to bring a single hybrid or electric car to market and has repeatedly missed launch deadlines. Every BYD car sold to consumers so far has a traditional gasoline engine, and its models are popular in China not because they are high-tech but because they are ultra-cheap. The company claims its plug-in hybrid, the much-vaunted F3DM, went on sale a year ago. But this model has yet to appear in any dealership, leading industry observers to speculate its battery is not ready for prime time. The all-electric e6 was supposed to reach the U.S. this year, a launch date subsequently pushed out to 2011. But the e6 still hasn't passed Chinese safety tests, let alone more stringent U.S. tests. Advance reviews of prototypes have been scathing: Car and Driver reported, "We drive faster in our driveways."

[profittaker]

瑞信∶维持比亚迪“跑输大市” 目标价34港元
2011年01月21日14:53阿思达克财经新闻瑞信我要评论(0)
字号：T|T
转播到腾讯微博
比亚迪(01211)

引述《彭博》，大众汽车(Volkswagen)正与中方合作伙伴商讨发展本地品牌。瑞信认为，这有机会进一步增加比亚迪(01211.HK)压力。评级维持“跑输大市”，目标价34元不变。

报告指，大众汽车最新计划如其他海外合资，转移发展小型及廉价本地品牌进攻低端市场。据悉，大众新品牌售价每辆约70,000人民币，比亚迪最畅销型号F3，以及F6、G3与L3型号有机会因而受影响，基於竞争不断升温，比亚迪可能会减价捍卫市场份额，此策略有机会阻障毛利复苏。

http://finance.qq.com/a/20110121/003953 ... A%E8%BF%AA