BYD 1211

[winston]

Not vested.

China's BYD eyes alternative energy vehicles

Chinas BYD Auto said Monday it is in talks to sell its battery products to overseas automakers as part of a bid to take a lead in the alternative energy vehicle sector. The firm is also in discussions with foreign governments regarding electric car projects, said Henry Z. Li, general manager of BYD Autos export division. "We are in talks with a number of foreign companies. We will supply the partner with our battery products in the cooperation, but we are not selling the technology," Li told AFP in an interview during the Shanghai Auto Show.

Li said although the market in new energy vehicles was yet to take off due to the lack of a large-scale battery recharging network or sufficient government subsidies, the firm is confident it can make a difference. BYD Auto is part of the BYD group, a Hong Kong-listed firm partially owned by US investment guru Warren Buffett. BYD stands for "build your dream".

"Electric vehicles are an opportunity. The issue is how we can seize the opportunity and bring our advantage into play," Li said. "New energy vehicles will gain a bigger market share and we are riding the trend... I believe we will be able to make the division break even within five years." BYD Auto beat other products, such as General Motors Volt, when it launched F3DM, a plug-in hybrid, in China late last year.

The company has said earlier the hybrid car is scheduled to go on sale in the United States and Europe in 2011. It plans to begin delivering on the E6, a pure electric car, later this year. The company aims to double its sales to 400,000 in 2009 and launch five new models this year. General Motors Asia Pacific president Nick Reilly, however, expressed reservations about the current level of technology being offered by BYD and other Chinese car makers, such as Chery.

"I think we ought to be very serious about considering Chinese companies as potential competitors in battery and electric vehicles," Reilly told a news briefing. "But from what weve seen so far the technology is not that advanced in terms of things like battery life, range and recharging." However, he said the technology could spread quickly, especially if backed by the right government incentives. "China may be the country that leads the switch to electric vehicles because there is a significant need in Chinese cities for small electric vehicles... you could see growth quite fast, maybe faster than other places in the world," he told reporters.

http://sg.biz.yahoo.com/090420/1/4n627.html

[winston]

Warren Buffett takes charge

Warren Buffett hasn't just seen the car of the future, he's sitting in the driver's seat. Why he's banking on an obscure Chinese electric car company and a CEO who - no joke - drinks his own battery fluid.

By Marc Gunther

http://money.cnn.com/2009/04/13/technol ... ney_latest

[winston]

BYD may supply batteries for Volkswagen

Apr. 28, 2009 (China Knowledge) - BYD Co<1211>, China's largest rechargeable batteries maker as well as automobile producer, is likely to supply lithium-ion batteries for Germany's Volkswagen AG and it will demonstrate its battery products at the automaker's headquarters in Germany, said Volkswagen CEO Martin Winterkorn at the Shanghai auto show last week, sources reported.

BYD's sales manager Wang Jianjun said that BYD is in lithium-ion battery supply talks with a number of foreign companies, and the company is willing to cooperate with overseas automakers on the development of lithium-ion batteries.

BYD Chairman Wang Chuanfu earlier said selling of batteries to automakers in overseas markets will help the company to further reinforce its leading position in the global electric car market and help it compete with other leading companies in the same field.

BYD's lithium-ion battery cells are relatively cost-effective, partly because of its advanced technology and the cheap labor force in China.

[LenaHuat]

For those who read Chinese:-
http://finance.ifeng.com/news/industry/ ... 4673.shtml

郭台铭三问巴菲特：敢不敢驾比亚迪车上下班

[winston]

Battery maker remains `unattractive' after share sale by Kathy Wang, The Standard HK

Morgan Stanley yesterday raised the target price of BYD Company (1211) by 70 percent to HK$16.5, but still maintains an "unattractive" evaluation on its stock performance.

BYD president Wang Chuanfu on Friday sold all his 11.2 million H shares in the company for HK$280 million, or HK$25 each, about 10 percent below the market price. He still holds 27.8 percent of the total issued share capital.

"Wang's share disposal was carried out at the behest of Chinese regulators and not due to any concerns over the company's future development." Bank of China International analyst Frank He said. "The company is still awaiting central government approval to sell 225 million shares to Warren Buffett's MidAmerican Energy."

Buffett last year said he would buy a 10 percent stake in electric vehicle maker BYD - a deal which is still in process. BYD said it is scheduled to launch its first all-electric car, the E6, in the second half.

"We think intensifying competition in handset components and batteries will put great pressure on BYD's margin outlook in what is a fragile market. We retain our Underweight rating." said a Morgan Stanley research report out yesterday.

Morgan Stanley said while BYD's move to solar batteries and industrial power storage businesses may offer long-term growth potential, these plans are in their early stages and expected to contribute hardly any immediate revenue in 2009.

"The share price has almost doubled since April 2009 and the stock now trades at P/E multiples of 41 times for 2009 earnings against our estimate. We see the current valuation as demanding.

"We believe the near-term catalyst for the stock will be battery shipments to European and North American automakers... we reiterate our "sell" rating for BYD," He wrote. The stock dipped 0.60 percent to end at HK$26.80 yesterday.

[winston]

VW lines up BYD for hybrid or electric venture

Europe's biggest carmaker Volkswagen is considering a tie-up with mainland company BYD on hybrid or electric cars.

VW head Martin Winterkorn and BYD chief Wang Chuanfu signed a letter of intent last week, citing possible cooperation on electric cars using lithium-ion battery technology.

''Especially for the Chinese market, potential partners such as BYD could help us expand our activities,'' VW board member Ulrich Hackenberg said.

China is VW's second largest market after Germany and is widely seen as a key producer and consumer of autos.

Major foreign brands have set up plants there in the past few years to take advantage of soaring demand.

The Shenzhen-based BYD, which was formed in 1995 and began auto-making in 2002, is now the world's second largest producer of lithium-ion batteries.

AGENCE FRANCE-PRESSE

[winston]

Buffett-Backed BYD Plans China Listing to Fund Growth (Update2) By Mark Lee

July 16 (Bloomberg) -- BYD Co., the Chinese carmaker backed by Warren Buffett, said it plans to sell shares in China to fund its expansion.

BYD plans to offer as many as 100 million so-called Class A shares in Shenzhen, where the company is based, according to a statement filed to Hong Kong’s stock exchange today. Proceeds will be used to develop its auto and rechargeable-batteries businesses, it said.

The automaker’s shares almost tripled in Hong Kong this year as China’s 4 trillion yuan ($585 billion) government stimulus lifted demand for the F3 model, the country’s fourth- best seller in the first half. The company last year agreed to sell about 10 percent to MidAmerican Energy Holdings Co., a unit of Buffett’s Berkshire Hathaway Inc.

“BYD needs a lot of investment into development of alternative energy vehicles,” said Vivien Chan, an analyst at SinoPac Securities Asia Ltd. “A mainland share offering will meet some of the company’s capital needs.”

BYD, China’s biggest maker of rechargeable batteries, gained 3.3 percent to HK$38 as of 9:50 a.m. in Hong Kong trading. A mainland share sale will need the approval of regulators and shareholders in Hong Kong, the statement said.

China’s government halved retail sales tax this year to help revive demand for cars and boost economic growth. That helped BYD’s sales to more than double to 176,814 units in the first half from a year earlier, according to the China Association of Automobile Manufacturers.

The carmaker’s market share increased by 2.59 percentage points to 5.45 percent, according to industry data. Among the top 10 carmakers in China, BYD gained the most market share. BYD aims to more than double car sales this year to 400,000 vehicles helped by exports and new model introductions, President Wang Chuanfu said in March.

[winston]

DJ MARKET TALK: BYD Off 4.1%; Shrs Ahead Of Fundamentals -Taifook

1505 [Dow Jones] BYD (1211.HK) down 4.1% at HK$41.25 on profit-taking after 3-day 16.8% rally, with stock trading at lofty 54.8X FY09, 45.1X FY10 P/Es based on Thomson Reuters, as investors assigning sizable premium (hard to quantify) on Buffett effect.

While positive on BYD's long-term prospects, Taifook says stock pricey, valuation "well ahead of its peers" in respective operating industries. Assuming respective P/E of 38X, 20X, 30X for BYD's battery, mobile handset component, automobile divisions, which already represent premiums to industry peers having taken into account company's leading position as battery maker on mainland, growth potential through electric vehicle deployment, raises target to HK$21.46 (previous target not stated), rates stock Sell.

[winston]

China BYD to raise 2.85 bln yuan in Shenzhen listing

HONG KONG, July 24 (Reuters) - Chinese battery and electric car maker BYD Company (1211.HK) expects to raise 2.85 billion yuan ($417.3 million) via a placement of not more than 100 million A shares, and said it would seek shareholder approval of the plan on Sept 8.

The proposal involves the listing of renminbi-denominated shares on the Shenzhen Stock Exchange, it said in a statement issued late on Thursday. The proceeds will be invested in the production of lithium ion batteries, expansion of an automobile parts and accessories unit, and the second phase of a solar battery manufacturing project.

[winston]

BYD investors, fasten your seatbelts: Wei Gu

Wei Gu is a Reuters columnist. The opinions expressed are her own --

HONG KONG, July 29 (Reuters) - China's bubbly stock market is making heroes out of some unlikely companies. And none more so than BYD Co. (1211.HK), in which Warren Buffett plans to take a 10 percent stake.

( Everybody says that is WB. My understanding is that it was Charlie Munger that made the decision. )

BYD has a much-hyped project to manufacture electric vehicles. Its shares have surged 140 percent in the past three months and 440 percent in the past year. They now trade at 74 times of current year profit and 54 time of next year earnings. That is double the level of capital goods companies and four times the multiple on which Chinese automakers trade.

BYD seems to have become the "poster child" for environmentally friendly transport. For all that, it has not yet sold any electric cars in its home market, though it has hundreds of trial customers in the government. The project may have real substance and it's fair to say that Buffett has probably done his homework. But meaningful earnings are at least two to three years away, assuming those trials are successful.

Meanwhile, BYD's real business is producing conventional cars and cell phone components. These do not support the company's stratospheric multiple. Investors seem to have bid up the shares, taking their lead from Buffett. But they should remember that Buffett bought in at around HK$7 a share, and now the stock is trading at HK$42. Moreover, Buffett's investment is under consideration in Beijing, and the company does not expect a decision until October.

But that doesn't seem likely to puncture the bullish mood. BYD's stock surged as much as 9 percent this week after it bought a bus maker in a pretty uninspiring deal. This is a sector where there is overcapacity. BYD's deal got pulses racing because -- surprise, surprise -- the company talked about using its electric propulsion technology to power buses.

Of course, Buffett may be on to something and BYD's chairman Wang Chuanfu may be right when he says he sees BYD as the largest auto maker in China in 2015 and the leading player in the world in 2025, with annual output surpassing 10 million vehicles. But this remains a mid-sized, highly geared company.

When stock markets bubble up, investors lose the ability to discriminate between hype and reality. And so it seems with China. Investors in BYD might ponder how much more bullish they are than the Sage of Omaha in the prospects for what remains a car and battery maker, and fasten their seat belts.