BYD 1211

[profittaker]

BYD's New Compact Sedan --- 3A




Source: http://mispricing.blogspot.com/2011/01/ ... an-3a.html

[profittaker]

Not vested

BYD Is the First Ripple in a Potential Chinese Wave
By BRADLEY BERMAN
GLENDALE, Calif.

LABELS that read Made in China are long familiar to American consumers. But a car for sale in the United States bearing those words — considering what that might portend for our economy and our self-image — could deliver a jolt far sharper than discovering that our newest digital gadget was produced in the world’s largest exporting country.
Yet there was no wobble to be felt in the earth’s rotation as I drove away from Cars 911, a used car dealership in this Los Angeles suburb where BYD Autos has set up temporary North American operations. The generic-looking BYD I was testing — read what you wish into the company name, whose initials stand for Build Your Dream — is a compact sedan so bland as to completely escape the notice of fellow drivers.

Still, it could make its mark: if BYD clears the regulatory hurdles, its F3DM plug-in hybrid would be a frontrunner in the race to become the first production car in American showrooms from a Chinese automaker — arriving as soon as next spring, the company says.

Despite its potential importance, hardly anybody noticed the F3DM, not surprising given its appearance — about as trendy as a Y2K-era Toyota Corolla. Until now, the car has been unavailable for test drives in the United States. The view from behind the wheel is as proletarian as it gets: no frills, no flash, no real driving engagement. It would be easy to chuckle at the F3DM’s minor flaws — the wobbly storage compartment between the front seats, subpar floor mats, squishy handling. But the build quality and materials seem perfectly adequate for utility-oriented Americans. The exterior panels line up; audio and air-conditioning buttons are a bit big, but easy to use; seats are reasonably comfortable. Slam the door and it goes “thunk.”

BYD says that later this year it will submit the necessary filings to obtain federal safety and emissions certification. My test car was a Chinese-issue production model, visiting California on a research exemption. According to company officials, “close to 10,000” of the F3DM models have been sold in the home market.
To focus on the F3DM’s inconspicuous sheet metal and boring driving experience is to miss the audacity of BYD’s strategy. Think of the F3DM as a Chevrolet Volt with a Wal-Mart price tag, a car with a large-capacity battery — that delivered 31 miles of uninterrupted pure-electric driving for me — as well as a gasoline engine that gives it the ability to go an additional 300 miles.

General Motors, however, loaded up the Volt with a powerful electric motor, an iPod-like console and a luxury feel that help to justify a $41,000 price tag (before state and federal tax incentives). The F3DM — which does have an auxiliary audio input jack and a parking sensor — is expected to sell for less than $29,000. Incentives could drop the price closer to $20,000.

My drive of the F3DM started with the 16-kilowatt-hour battery charged to 95 percent of its usable capacity. Instead of babying it to see how close I could get to the 60 miles of E.V. range BYD claims, I punished the F3DM with a succession of pedal-to-the-floor freeway merges and herky-jerky speeding and slowing, all with the air-conditioning going full tilt.

No matter how hard I floored the accelerator or how hard I pushed to keep pace with the frenzied Los Angeles freeway traffic, the F3DM stayed in purely electric mode, as long as the battery’s state of charge was above 20 percent. Acceleration, as expected, was quick off the line — not as snappy as the Nissan Leaf, but better than electric offerings from niche E.V. makers like Smart and Think.

After 31 miles of this flogging, the battery reached its 20 percent switchover threshold and the car automatically shifted from pure E.V. operation to its hybrid mode.
The F3DM can be described as a plug-in hybrid, but dual mode — that’s what the DM stands for — is more accurate. Drivers can manually toggle between modes.
The F3DM’s E.V. button is not like the one on a regular production Toyota Prius. Those are stingy things, generally yielding a few blocks of engine-off electric driving (Toyota says it can go a mile, conditions permitting). The F3DM’s mode choices offer dozens of miles of all-electric driving, even while the switch is in hybrid mode. One day of driving didn’t begin to scratch the surface of how to finesse the modes for maximum efficiency.

That will be fun for the tech geeks, but is irrelevant for BYD’s aim of bringing a practical energy and environmental solution to a billion potential customers in China — and a truly affordable option for the growing number of American consumers who just want to get to work with cheap homegrown electricity.

If my destination had been in those first 30 to 40 miles, which the F3DM can easily achieve with sensible driving techniques, and I had the opportunity to charge the car for a full work day or overnight, the gas in the 8-gallon tank would go stale before having a chance to be burned in an engine.

Conserving a precious dwindling commodity is a fine reason to drive a plug-in hybrid, and avoiding price spikes at the pump is another strong incentive. But with the F3DM, there’s a more immediate imperative to keep the engine dormant: when the battery drops to a 20 percent charge level, the 3-cylinder engine loudly rumbles into service. No, it’s more accurate to say that it screeches like a banshee as it converts gasoline into power that can turn the motor — now acting as a generator — to bring up the battery charge to 30 percent.

Much of the recent progress in conventional gas-electric hybrids has been aimed at making a seamless transition from gas to electric and back again. Not so with the F3DM. The car’s personality shifts from a quick, nimble and silent E.V. to a revving demon. The steering wheel vibrates. The dashboard hums. You feel the vibration in your molars. As long as the battery pack’s charge is in the 20 to 25 percent range, the F3DM’s urgent priority is to fill up the batteries to about 30 percent so that electric driving can be resumed. Even at a stop, when other hybrids — and gasoline-only cars in increasing numbers — use an idle-stop feature to shut down the engine, the F3DM’s engine noisily stays on task.
After about a minute at a standstill, the car’s computer reluctantly stops the loud engine. But even a gentle toe on the accelerator brings the engine back to a roar. If you need to accelerate onto the Interstate while the engine is busy recharging the batteries, the engine power is routed directly to the wheels to assist the electric motors, for a total combined output of 168 horsepower.

But as loud as the engine roars, drivers can take comfort: allowing the engine to rev operates the system most efficiently. At a standstill, the engine backs down to about 1,800 r.p.m., just recharging the batteries. Step on the accelerator and it speeds up to about 2,700 to 3,000 r.p.m. for charging plus acceleration. The gas engine is either running hard or running harder.

With some engineering effort, better engine mounts and lots of sound damping, BYD can reduce the din. The company has nearly a year to absorb feedback from spoiled Americans and do something about it. The hardest engineering is done, and there are no showstoppers. All of the problems are fixable without adding a lot of cost.
BYD’s to-do list before bringing the F3DM to the United States next year already includes upgrading the charging system with an SAE-standard J1772 connector found on all new plug-in cars.

BYD says the current F3DM will be sold in limited numbers to corporate fleets, but a new and improved version, possibly with a new name, is in the works for individual car shoppers.

What might be harder to fix is Americans’ doubt that Chinese cars will be reliable and durable over time. Some industry analysts have suggested that nagging quality problems have cost BYD sales in its own market, even though the gas-only F3 — the basis for the F3DM — tallied more than 264,000 domestic sales last year, making it the No. 1 seller in China in 2010, according to J. D. Power & Associates.

BYD’s challenge is made more daunting because it will take years to establish a nationwide network of dealers. The company, which will base its American headquarters in downtown Los Angeles, plans to start by opening about five dealerships in early 2012, where it will also sell the e6 pure electric car (with a promised 200-mile range), as well as BYD solar panels, solar-shaded parking systems, home energy-storage systems, charging systems and LED lighting.

By the end of my day with the F3DM, I had logged 112 miles and used 2.3 gallons of gas. That comes to 48.7 m.p.g. for the day, mileage that my 2006 Prius would not have reached given my frequent stomping on the accelerator. It was once thought impossible that Japanese and Korean cars would ride alongside Fords, Chevys and Dodges on American roadways. After my day with the impressive, though imperfect, F3DM, I see that Chinese cars—electric and affordable — are not only possible, but imminent.
You don’t believe it? Then consider the view of the investor Warren E. Buffett, who was on hand in Shenzhen last year to attend the Chinese market debut of the F3DM. His Berkshire Hathaway holding company invested $230 million in BYD in 2008. The latest BYD models will be displayed at a Berkshire Hathaway meeting in May.

Source: http://www.nytimes.com/2011/02/20/autom ... nted=print

[profittaker]

not vested

The founder of fast-growing BYD wore shop clothes for an interview to forecast the company's bold future

(Shenzhen) -- Investment bankers who've met auto and battery magnate Wang Chuanfu say he's an adept storyteller. So after Wang agreed to an interview with Caixin, we were anxious to hear his description of a personal encounter with Warren Buffet, and how he managed to win the billionaire investor's support with the BYD story.
Wang relayed the experience recently when we sat down together at BYD's headquarters in Shenzhen, flashing a proud smile but quickly turning serious.
(Wang Chuanfu)

Buffett, he said, expressed deep interest in BYD's new-energy dreams. Wang, however, made it clear that the company would have to rely heavily on government support.
In fact, as Wang tells the story, although BYD grew quickly as a battery-maker and carmaker in the private sector, it's now an increasingly government-dependent operation. Indeed, the new-energy dream that Buffet and BYD's other private investors are chasing relies on government subsidies and contracts: That's the true story of BYD's success.
Wang turned 44 in 2010, and it was the most controversial year for the business since he founded BYD 15 years earlier.

In 2003, many scoffed when Wang decided BYD would leapfrog from consumer battery manufacturing into the auto industry by acquiring Xi'an Qinchuan Auto. He later rattled conservative industry players by signing up Buffet as a major investor. In 2009, his company sold 440,000 vehicles a year.
BYD and Wang, who serves as company president, climbed a new mountain of controversy in 2010 when sales fell short of an 800,000-vehicle goal, and critics of the new-energy strategy noted that no new models were brought to market that year.

The company's dealer network also withered, with a number of dealers withdrawing from the network last year.

BYD reported sales of 519,800 units in 2010, up about 16 percent from 2009 but below many of its competitors in China, some of whom saw sales jump more than 30 percent last year.

Moreover, company costs rose 48 percent through the first three quarters of 2010 compared to the same period the year before.

The biggest source of doubt about the BYD dream surrounds the new-energy vehicles that it's promised and promoted for years, but has yet to produce for the market. BYD has repeatedly postponed an introduction and, even years of talk, total pre-market production remains below 1,000 vehicles.

Despite the controversy over a seeming lack of progress, Wang and other company executives have been busy telling the world BYD's story, talking up the company's value and outlining their strategy to investors.

When Wang met Caixin at BYD's Pingshan headquarters, he was wearing beige workshop clothes and a badge card identifying him as worker No. 1. He also wore a calm expression. As usual, he'd come to work early and planned to stay late.

Here's how the story unfolded, in Wang's own words:
One aspect of doing business is meeting the interests of shareholders. Another is using technology to provide better things for society, the world and the future, while encouraging society to change in a good way; this is BYD's original dream.

What will the future bring to the company and society? I think we should embrace new energy. In fact, the government has given new energy a high strategic position. This is a good opportunity. We have a dream, and the state has given a high degree of support.

From batteries, we moved into electric vehicles, energy-storing power plants and solar energy: These three industries can be connected just right, and the key is battery technology. (Energy-storing power stations and electric cars) involves the technology linking two ends.

Energy-storing power stations are needed to manage power generation methods such as solar and wind, which do not produce steady levels of power.
Among these three industries, the electric car will slowly grow over the next three years. I think the solar energy industry will explode in 2016. We just began working on energy-storing power stations this year, and the industry will grow slowly over the next decade.

New energy's capital demands are too great. Thus, we need to increase the profitability of our IT components and traditional automobiles. But if we wait for the solar industry explosion and then prepare, we'll be too late.

Traditional Autos
We have two automotive sector goals: To be the largest automaker in China by 2015 and the largest in the world by 2025. Fortunately, we are in China, the largest auto market in the world. China today sells 18 million vehicles annually. In the future, this may reach 50 million.

In the traditional auto business, we have some profitability. From our acquisition of Qinchuan and its transformation into BYD Auto, from several thousand vehicles then to 440,000 vehicles in 2009, growth has been very fast. Growth in 2010 was a little slower, mainly because we made some mistakes in our sales network. We're making adjustments now.
We're becoming more competitive in the traditional auto field. The Chinese market is the fastest-growing and most competitive. Foreign companies originally did not make cars that cost less than 100,000 yuan. Now, they are all making them.

Our competitive pressure will increase. The 2010 goal to sell 800,000 vehicles was a bit high. We actually sold 520,000.

With regards to our dealer network, our mistake in 2010 was to expand the network for the goal of 800,000 vehicles. The network seemed a bit excessive. Additionally, the early threshold we set for dealers was too low, and we let some in that shouldn't have been there.

With rising labor costs, we're also increasing our level of automation. This process began three years ago.

Making traditional cars not only generates profits to support the new energy side of the business, but by mastering complete-vehicle technology, air conditioning, batteries, etc., we build a technology base for new-energy vehicles.

New-Energy Industrialization
We're currently using cars to support cars. It's still very difficult for new-energy vehicles to make money. Research and development for a new-energy vehicle requires 1 or 2 billion yuan.

There are currently 50 E6s (a BYD car model) operating as electric taxis in Shenzhen. The most-used taxi has logged 70,000 kilometers, equivalent to five years of driving a private car. The battery has not decayed, which shows that our battery quality meets high standards.

But we still have not reached large-scale production. The current price of an E6 is 300,000 yuan. While the car will save on energy costs during its operation, a taxi company can buy a regular Jetta for 90,000 yuan. If we can reach production capacity of 200,000 vehicles, the price of an E6 will be cut in half.

And for the F3DM (another BYD electric) model, there are currently more than 200 orders a month in Shenzhen. But we can provide no more than 100, mainly because battery production capacity can't keep up.

In March this year, we will start using a new battery production line. Capital demand for battery production expansion is great. But we have the subsidiary BYD Electronics, which is listed in Hong Kong as a red chip. If necessary, we can raise money at any time. We can also issue additional BYD H-shares at any time, and we're still fighting to issue A-shares.
Overall, our debt ratio is not high, 50 percent, which is lower than our domestic counterparts. Our bank credit line is 30 or 40 billion yuan, so we're not constricted financially.

Also, the government is promoting electric public transportation. Our all-electric bus has already received orders -- about 1,000 vehicles for the full year, which means revenues of more than 2 billion yuan. We think orders will be similar in 2012. Then at least won't be losing money.

In new-energy vehicles, the struggle within the industry for a technology route has begun to move toward unification. Now, it is pure electric cars and plug-in hybrids. As to an understanding of industrialization, each manufacturer has its own timetable for the introduction of new-energy vehicles. We think industrialization of new-energy vehicles will be fully developed in the next two or three years.

A bottleneck for industrializing new-energy vehicles still lies in the policy environment. Policies surrounding new-energy vehicles need to have a system, for example, for a purchase tax, vehicle and vessel tax and consumption tax. Setting these tax rates at zero would be a big help.
But right now, policies are not coordinated. In places such as Beijing and Shanghai where there are restrictions on new license plates, couldn't new-energy vehicles be exempted? And then there are road tolls and other things.

2011 Goals
Global solar power is now 15 gigawatts. China has only 0.6 GW, which is not very proportionate. China's subsidies in this area are few. Solar power wasn't written into the 11th Five-Year Plan. Wind was, and its development has been more rapid. Solar power should be put into the 12th Five-Year Plan.
In fact, two years ago the bidding price for solar power was more than 2 yuan per kilowatt hour. In 2009, this fell to more than 1 yuan, and now it's 0.72 yuan. That's the market. Following this trend, it would be no problem for solar power to reach 0.5 yuan in the future. Coal-fired power is currently a bit more than 0.3 yuan, and it will rise. We estimate that by 2016 or 2020 the two will cost about the same, and the solar market will explode.

In 2010, BYD's solar business reached 800 to 900 million yuan. (BYD makes solar cells) In 2011, it might substantially increase to 7 or 8 billion, mostly for export. In 2011, we will make solar energy a new business category.

With around 2 billion yuan in sales from electric buses, together there will be 10 billion yuan in revenue.

In 2010, total company revenue was around 46 or 47 billion.

Buffett and Me
Contacts with Buffett first began two years after BYD listed, in 2003 and 2004, when a fund run by Buffet's partner Charles Munger began buying into BYD. After that, they slowly began observing.

BYD is different from other companies. We get involved in many, highly competitive industries with nothing at the time of our entry. Later, we do well. We have our own technology and can get orders from foreign companies, especially recognition from top-level companies such as Motorola, Nokia, Apple and Samsung.

BYD's core competitiveness is still technology. We currently have 200,000 personnel and 150,000 engineers. Our engineering team is our main asset, but it doesn't show up on our financials. We have 1,500 patents a year across all businesses. Our mold technology and battery technology have reached the top international level.

Our stock was relatively cheap at one time. At listing, it was 10 yuan per share. It is now 40 yuan. At the time we gave Buffett the recommendation, it was only 7 or 8 yuan.
Buffett was attracted to our new-technology strategy, our growth history, management team and work style. Buffett sent David Sokol to us. At first, he didn't believe we were making so many products. Every day, he found that what we did was actually quite successful -- engines, chassis, batteries, semiconductors. Later, he went back and gave his recommendation to Buffett.

After the investment was made, I went to America to see Buffett. The office was small, the corridors narrow and there were no computers. In total, there were only 20-some people. Buffett came to see BYD in 2010. This was the first visit.

Source: http://english.caing.com/englishNews.js ... 1&page=all

[winston]

Not vested

DJ MARKET TALK: Daiwa Starts BYD Co At Hold, Target HK$31.10
Feb 25, 2011


1015 [Dow Jones] STOCK CALL: Daiwa starts BYD Co. (1211.HK) at Hold with a HK$31.10 target price. The house says despite the negative impact on 2011 gross profit margin from a new round of price cuts, announced in mid-February, it expects the auto business' earnings to remain flat for the period as the move should help boost 2011 sales volume.

Daiwa notes the company's integrated solar-power business may become a new earnings driver, but the business' revenue is still small compared with its auto business.

The house notes the stock has been consolidating around HK$30 level after falling more than 50% over the past year; "we believe the current share price has factored in much of the negative news flow.

However in our opinion, the stock remains unattractive." The house estimates the stock is trading at 2011-12 PER of 15.9X and 12.4X respectively; the house forecasts 2010-12 EPS CAGR of 22%.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: Morgan Stanley Keeps Positive View On BYD Co
Feb 17, 2011

1323 [Dow Jones] STOCK CALL: Morgan Stanley remains positive on BYD Co. (1211.HK) despite the stock's recent selloff on concerns over uncertain industry demand amid rising policy risks and the company's delay in commercial sales of its S6/EV.

The house notes BYD's January auto shipments grew 1.5% on-month, lagging the China market's +15.7% and domestic brands' +9.4%; the house expects BYD's February shipments to fall bank to the sub-30,000 level due to fewer working days around the Lunar New Year holiday, but it expects sales strength should resume in March.

"We retain our positive view on BYD as the company's favorable model mix (90% subsidy eligible) and strong presence in lower-tier cities could help offset system risks, while impact of model delay is already factored in our estimates.

" The house tips the stock's recent pullback offers a good entry for long-term investors and keeps an Overweight call with a HK$53.00 target price.


Source: Dow Jones Newswire

[winston]

Not vested

DJ MARKET TALK: CS Says Not Right Time To Bottom Fish BYD Co Yet
Feb 17, 2011


1215 [Dow Jones] STOCK CALL: Credit Suisse cuts BYD Company's (1211.HK) target to HK$29.00 from HK$34.00 after it lowers BYD's FY11-FY12 EPS forecast by 5.0% to reflect its softer sales and margin assumptions; the house keeps the stock at Underperform.

CS says BYD's January car sales (down 15% on-year at 52,054 units) underperformed the rest of the China auto market; it adds, despite the recent share price weakness, "we believe it is not yet the right time for bottom fishing."


Source: Dow Jones Newswire

[winston]

Not vested

DJ BYD Co Plans To Launch A-Share IPO In Shenzhen This Year - Report
Jan 12, 2011

SHANGHAI (Dow Jones)--Hong Kong-listed Chinese auto maker BYD Co. (1211.HK) plans to launch an initial public offering of A shares on the Shenzhen Stock Exchange this year, Chinese news portal sina.com reported Wednesday, citing company director Li Ke.

BYD plans to sell around 100 million shares, the newspaper reported Li as saying, without offering more details.

The firm originally planned to list in Shenzhen in 2008 but delayed its plan due to an unfavorable stock market environment, the report said.

Newspaper website: http://www.sina.com.cn


Source: Dow Jones Newswires

[profittaker]

car design, safety, comfort are BYD weakness, could Daimler complement BYD? 取长补短。

Source: http://www.byd.com/buzz/company-news/jo ... s-license/

Date: 1st Mar 11

Joint Venture between BYD and Daimler Receives Business License

Geneva, Switzerland – March 1, 2011, "Shenzhen BYD Daimler New Technology Co. Ltd." has received its business license from Chinese authorities. The 50:50 Joint Venture between BYD Company Limited and Daimler AG will develop an electric vehicle in and for China.

Mr. Wang Chuanfu, Chairman and President of BYD Company Limited: "Our Joint Venture is making excellent progress. At the research and technology center in Shenzhen, the German and Chinese engineers, designers and other experts are very well aligned and will soon be joined by more colleagues from both partners. We all are eager to utilize the strengths of our two companies to create a new brand of electric cars in China.”

Dr. Dieter Zetsche, Chairman of the Board of Management of Daimler AG and Head of Mercedes-Benz Cars: “We've now got the green light to move ahead - and we are especially pleased to receive the business license just a few months after signing the contract. It will accelerate our joint efforts to create an all-new electric vehicle for the Chinese market."

The electric vehicle developed by the joint venture will capitalize on BYD’s excellence in battery technology and e-drive systems as well as Daimler’s know-how in electric vehicle architecture and safety. The vehicle will be marketed under a new brand jointly created and owned by BYD and Daimler.

The business licence follows the signing of the Joint Venture contract by Chairman Wang and Dr. Zetsche in Beijing on May 27, 2010.

[eauyong]

2011/03/14 09:02
BYD Company (01211) year net down 33% to Rmb2.52bn; no div

<ET Net News Agency, 14 March 2011> BYD Company (01211) said its net profit dropped
33.48% year-on-year to Rmb2.52 billion for the year ended 31 December 2010.
Its basic and diluted earnings per share were Rmb1.11.
The revenue was Rmb46.69 billion, an increase of 18.28%; with a gross profit of Rmb8.26
billion, down by 3.51%.
No final dividend will be distributed. (HL)

[eauyong]

From The Standard

BYD tightens belt for 2011

15/03/2011

BYD (1211) has estimated sales growth in the mainland auto market this year will only be 10 to 15 percent - shaply down from the 36 percent rise in 2010.

Wang Chuanfu, chairman of the Warren Buffett-backed automaker, said yesterday the Shenzhen-based company will see sales growth in line with the domestic market.

Wang said the market faces challenges, as the central government has removed incentives, while the Beijing municipal government has imposed tougher measures to ease traffic jams.

The central government terminated preferential policies on auto purchases in December.

Apart from these two adverse factors, Wang attributed BYD's 49 percent decline in auto sales last month versus January to the Lunar New Year.

Given the profit margin drop and relatively high debt ratio, BYD plans to scrap auto production capacity expansion and reduce spending on operations, while diversifying its financing channels.

This would include seeking a listing on the A-share market, Wang said, declining to specify a timetable for the move.

BYD's gross profit margin fell four percentage points from 2009 to 17.7 percent last year - blamed mainly on cutthroat competition.

It saw 2010 annual profit drop 33 percent to 2.52 billion yuan (HK$2.99 billion).

Shares slipped 1 percent yesterday to close at HK$34.60.