BYD Responds to Stake Cut by BlackRock, World’s Largest Asset Manager

Chinese new energy vehicle and battery giant BYD on October 17 released a report for the first three quarters of 2022, indicating that the company’s performance during the period had risen sharply. However, at nearly the same time, world-leading asset manager BlackRock launched a reduction in BYD H shares, bringing its shareholding ratio from 6.21% to 5.85%. Regarding the matter, BYD responded, “We have tried to communicate with our shareholders, but have not learned any substantive information. Reducing holdings is their free choice.”

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In fact, since July this year, BlackRock has increased its holdings of BYD H shares twice, and on October 10 and 11, BlackRock reduced then increased its stake. According to industry analysts, BlackRock has a habit of such frequent and short-term trading behavior.

In April of this year, BlackRock sent four fund managers and analysts to investigate BYD, focusing on the application of BYD DM-i super hybrid, its passenger car sales system, commercial vehicles and the progress of pure electric driverless distribution vehicles.

In addition to BlackRock, Warren Buffett has also reduced his holdings in BYD. In August this year, Berkshire Hathaway, which is owned by Buffett, sold 1.33 million H shares of BYD, with an average selling price of HK$277.1016/share, and its shareholding ratio dropped to 19.92%. Subsequently, BYD responded, “There is no need to over-interpret, everything is normal.”

According to the performance forecast recently released by BYD, in the first three quarters of this year, the company’s expected profit exceeded 9 billion yuan for a year-on-year increase of nearly three times. Specifically, the company expects the third-quarter net profit after deducting non-recurring gains and losses to exceed 5.071 billion yuan – a record increase of about 10 times year-on-year.

Behind its outbreak in business performance is the hot sales of BYD NEVs. In the first nine months of this year, BYD sold more than 1.18 million NEVs, surpassing Tesla by about 280,000 vehicles. Among them, in September, the sales volume exceeded 200,000 vehicles, setting a new record.

At the same time, BYD NEVs are frequently appearing in more markets around the world, and their prices are much higher than in China. In September this year, BYD sold a total of 7,736 new energy passenger cars overseas, as well newly exported cars to Japan, Germany, Sweden and other countries and regions.

BYD said that in the third quarter of 2022, despite multiple unfavorable factors such as a complicated and severe economic situation, continued impacts of pandemic policies, extreme high temperature weather and high raw material prices, the new energy automobile industry still continued to accelerate. BYD sales of NEVs maintained strong growth, continuously hitting record highs, and its market share was far ahead and continuously strengthened, achieving substantial monthly and annual growth, promoting substantial improvement in profits and effectively alleviating the profit pressure brought about by rising upstream raw material prices.