BYD 1211

[LenaHuat]

Warren Buffett's glowing :

When Berkshire's MidAmerican Energy Holdings agreed last fall to make its $230 million investment in BYD, the Chinese company was trading just over HK$8 in the Hong Kong market.

Now BYD's stock is over HK$42, an increase of about 400 percent. That means Berkshire's original $230 million investment is now worth about $1.2 billion on paper.

Buffett's willingness to back the company has helped boost the stock price, of course. BYD soared 42 percent in the day after it was announced, but at that point it was still below its high of HK$20 from the previous year.

[winston]

Rise in auto sales sends BYD into profit power lane by Benjamin Scent, The Standard HK

BYD Company (1211), the Chinese maker of batteries and electric cars backed by US billionaire investor Warren Buffett, said first-half net profit surged 97.7 percent after its car sales more than doubled.

Net profit for the six months ended June 30 rose to 1.18 billion yuan (HK$1.33 billion) from 595.66 million yuan in the corresponding period last year, and first-half revenue at the Shenzhen-based company rose 30.2 percent to 16.13 billion yuan.

BYD said its car-making business enjoyed improved economies of scale and seized market share from rivals.

First-half sales volume jumped to 180,000 units, an increase of 150 percent compared to last year.

Sales of rechargeable batteries fell 41 percent year-on-year to 1.93 billion yuan on a sluggish market for mobile handsets, a sector in which most of BYD's batteries are used.

Subsidiary BYD Electronic (0285), which makes components for mobile handsets, reported first-half net profit declining 46.8 percent to 228.89 million yuan as its gross margin fell and it increased investments in research and development.

Revenue for the six months rose 4.5 percent to 3.8 billion yuan.

The chief executive of BYD Electronic, Li Ke, said the contracting global economy will lead to an intensified consolidation in the handset industry during the second half of the year.

"The global handset industry will slowly bottom out," he said.

Neither company declared an interim dividend, which was the same as in 2008.

[winston]

Not vested. Next time, I would put some money on concept stocks ...

===================================

From Phillips:-


Risk

1) Slackened economy largely reduced demands for auto, handset and batteries;
2) Uncertainty of electric car's future development;
3) Litigation with competitors.


Valuation

BYD is applying for IPO in Shenzhen A-share listed, we expect EPS forecast in FY09 and FY2010 to RMB1.08 and RMB1.44 respectively, that is HK$1.23 and HK$1.64, regarding to its optimistic auto part which is able to compensate for the down IT part.

Favored by competitive edge in vehicle battery technology, BYD is likely to play a leadship in the revolutions of auto industry in the future, which accounts for Buffett's purchasing 10% equity shares of BYD at USD 230 million.

From this point of view, we think BYD deserved certain premium in valuation. Through SOTP valuation, we give 1.5 x auto parts PEG, 20x Battery, 14x handset P/E to each 2010 EPS, which implies 12-month overall TP of HK$11.20, hold rating.

[winston]

DJ MARKET TALK:BYD Co +3.2%;Barclays Ups Stake;But Pricey-Tanrich Oct 23

1515 [Dow Jones] Barclays has raised stake in firm to 5.41% from 1.33%, after it bought 32 million BYD's H-shares Oct. 16 at average price of HK$78.145/share, according to stock exchange disclosure.

Jackson Wong at Tanrich says stake buy news positive to BYD, but adds, valuation-wise, stock too pricey (current level at 77X FY09 P/E based on Thomson Reuters). Suggests reentry price at HK$60.

"Some investors continue buying the stock on expectations the (winning streak) could sustain in the medium term on positive outlook assumptions, but I would suggest a reentry price at a lower level, as limited upside expected ahead after its strong showing of late."

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: BNP Raises BYD Co Target To HK$85.32 Vs HK$60.38; October 9

1506 [Dow Jones] STOCK CALL: BNP Paribas raises BYD Co. (1211.HK) target to top-of-street HK$85.32 from HK$60.38 after increasing FY10-11 earnings estimates by 23%, 35.7% on earnings contribution from hybrid, electric buses as well as continuation of strong sales in conventional car segment; keeps Buy call.

In short run, tips BYD's strength will be conventional cars, but in long run, tips growth will come from hybrid, electric vehicles. Says electric buses another growth driver, amid increasing urgency for greener modes of public transport; with government subsidies, expects BYD to sell more than 10,000 buses next year, accounting for more than 7% of total revenue in 2010.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: Morgan Stanley Ups BYD Company Target To HK$31.10; Sep1

1111 [Dow Jones] STOCK CALL: Morgan Stanley maintains BYD Company (1211.HK) at Sell but raises target to HK$31.10 from HK$22.20; broker says it underestimated power of BYD's operating leverage expansion after improving scale of gasoline cars.

Notes 1H09 fully diluted EPS of CNY0.52 (+92% on-year) beat broker's own projection and market's by 35%-40%. "Impressive performance was aided by rising brand image while aggressive capacity expansion should carry momentum into 10e if demand holds up."

Adds, BYD aims to use its battery expertise to tap electric car and power storage, "which can further strengthen its presence as a total solution provider with lower costs." Still, warns it's too early to tell if company can duplicate its success in vertical integration in solar, given severe competition.

Source: Dow Jones Newswire

[winston]

DJ MARKET TALK: CS Ups BYD To Outperform; Raises Target To HK$59 Sep 1

0932 [Dow Jones] STOCK CALL: Credit Suisse raises BYD (1211.HK) to Outperform from Underperform, target price to HK$59.00 from HK$18.40, after impressive 1H results.

Notes solid auto sales, better utilization helped division record 133% increase in sales while margins also expanded substantially, more than enough to cover the weaknesses in batteries, handset segments.

House "further excited" by BYD Auto's pipeline; says over next 12-15 months, company expected to launch number of new energy vehicles, which include DM hybrids, pure electric vehicles such as e6, eBus; overall forecast 43% EPS CAGR in FY09-12.

Source: Dow Jones Newswire

[Aspellian]

BYD share price:

High - HK$88.40 on 23rd Oct (as a result of gapping up from previous day of HK$83.6) - closed day at 85.5 (a sign of price exhaustion)
Current - HK$72.3 (just above MA 30 days) after gapping down on 29th Oct. 50DMA at HK$58 (still 20% away)

Weekly chart shows "railroad" formed in last 2 weeks... maybe a big down from here.

Analysts target prices
- CS: 59
- MS: 31
- BNP: 85
- Philips: 11.2

Barclays entered at HK$78 (slightly under-water) - 5.4%
Interesting to watch its share price movement.

Will put this counter on my watchlist as super-growth stock for next upswing; hopefully price will come down more reasonably.

THanks Winston for highlighting this counter.

[kennynah]

is this BYD1211 same company as listed in the US Exchange, with the ticker BYD?

[lithium]

No sir!