• Wed. Sep 28th, 2022

Warren Buffett’s company cuts stake in Chinese electric vehicle maker BYD

ByRandall B. Phelps

Aug 30, 2022

OMAHA, Neb. – Warren Buffett’s company has cut its stake in Chinese electric car and battery maker BYD for the first time since it bought the shares in 2008, an investment that has soared in value.

Berkshire Hathaway BRK.B,
-0.71%

BRK.A,
-0.83%
said in a regulatory filing with the Hong Kong stock exchange on Tuesday that it had sold 1.33 million of its BYD shares for about $47 million (HK$368.8 million).

Berkshire paid $232 million for the 225 million shares of BYD 1211,
-9.51%
he bought in 2008. By the end of last year, the value of those shares had soared to nearly $7.7 billion. The success of BYD investing is an example of why so many investors follow Buffett’s moves closely, as he has a remarkably successful track record over the decades.

BYD said in an earnings report this week that sales of its vehicles continued to climb in the first half of this year and helped it increase market share, even as auto sales slowed in its domestic market, China. BYD said its revenue jumped nearly 66% in the first half of this year on the back of rapid growth in its electric vehicle sales, and its net income more than tripled to $520 million ($3.6 million). billion yuan).

Berkshire said it owned about 7.7% of BYD before the latest stock sales, and that figure won’t change much after the sales. Berkshire said its holdings of BYD shares issued in Hong Kong fell slightly from 20.49% to 19.92%.

In the past, Buffett and Berkshire Vice Chairman Charlie Munger have praised BYD Chairman and Founder Wang Chanfu and said they invest even more in him than in BYD technology. Munger said Wang managed to accomplish several feats that seemed impossible at the time, including taking a third of the lithium battery market from Japanese manufacturers by 2010.

Buffett even took the rare step of visiting a BYD factory in China in 2010 to show his support for the company. H did not immediately respond to questions about the BYD stock sale on Tuesday.

Besides investments, the Omaha, Nebraska-based Buffett conglomerate also owns more than 90 companies, including Geico Insurance, BNSF Railroad, several major utilities, and an eclectic assortment of retail and manufacturing companies such as Dairy Queen. , Helzberg Diamonds and Precision Castparts.