Overvalued? But capital is still flocking to BYD.
After many consecutive days of plummeting, BYD finally ushered in the red in March.
On March 1, BYD A shares (002594.SZ) closed up nearly 7%, after a cumulative decline of more than 26% in the previous 7 trading days; BYD H shares closed up more than 8%, after a cumulative decline of more than 8 trading days. 26%.
On the news, on February 27, “Stock God” Buffett’s Berkshire Hathaway Company (hereinafter referred to as “Berkshire”) disclosed in the annual open letter to shareholders List of top ten heavy stocks. Among them, BYD ranks eighth as the only Chinese company on the list, with a position of 8.2%.
As of the end of last year, Berkshire held 225 million shares of BYD, with a market value of over US$5.8 billion.
At the close of today, BYD A shares fell 0.78% to 209.75 yuan; BYD H shares fell 0.09% to 214.4 Hong Kong dollars.
It is understood that in September 2008, Berkshire subscribed for 225 million BYD H shares at a price of 8 Hong Kong dollars per share, with a total transaction value of approximately 1.8 billion Hong Kong dollars (about 230 million US dollars). In the following 12 years, Berkshire has never sold a share. Calculated from this, as of the end of last year, Berkshire made more than US$5.6 billion by buying BYD stocks, equivalent to more than 37 billion yuan.
Wind data shows that BYD still ranked first in the market value of domestic vehicle companies in February, with a total market value of nearly 600 billion yuan.
However, BYD’s performance does not seem to be enough to support such a soaring market value.
In the first full year (2009) after Berkshire took a stake in BYD, BYD’s revenue was 39.469 billion yuan (RMB, the same below), a year-on-year increase of 47.34%; net profit was 3.794 billion yuan, a year-on-year increase of 271. %; Earnings per share is 1.77 yuan.
According to China Business News, Guosen Securities analyst Liang Chao estimates that BYD’s 2020 net profit will be 4.484 billion yuan, and its forecasted earnings per share will be 1.64 yuan; Essence Securities analyst Yuan Wei expects its 2020 net profit to be only 4.439 billion yuan, with earnings per share of 1.55 yuan. According to the above forecast, BYD’s earnings per share last year may not be as good as 2009.
In fact, Buffett seems to admit that BYD is overvalued.
Recently, Berkshire Vice Chairman Charlie Munger said, “I think there are some speculators in the Chinese market, so BYD’s stock price is a bit high, but we like this company and we tend to continue Hold.” At the same time, Charlie Munger believes that BYD’s share price has risen rapidly in the past few years because it is in a very favorable position in the industry and has seized the opportunity to transform gasoline vehicles to electric vehicles.
inUnder this circumstance, capital is still pouring into BYD continuously.
Recently, Hillhouse Capital invested US$200 million in BYD’s latest round of fixed growth. Prior to this, Hillhouse Capital liquidated the new car-making forces Weilai, Xiaopeng Motors, and Ideal Motors.