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BYDDF - BYD Company Limited


merkhet

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  • 2 weeks later...

Bought a starter here tonight at 42. I think it's starting to make sense to pivot outside the US a little bit. China related stuff has been beat down a bit, and unless you are part of the liberal doomsday group, we all know the trade wars will eventually end.

 

Sold this. Can't argue with 15%+ in under two weeks. Better lucky than good. Still think reducing US exposing would be wise. Canada looking intriguing.

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  • 1 year later...

I have been disappointed that they haven't had any Skyrail projects of substance other than the one at BYD HQ in Shenzen and the one in Yichuan I know they have signed a few MOU but my understanding is they are off to a slow start.

 

If anyone has heard anything else concerning their Skyrail project please correct me. Also if I'm not mistaken the current price is less than when Charlie bought some in 2017 now I just have to try to work out how he sees intrinsic value.

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BYD has been roaring back this year and last night guides to 129% net profit improvement on the back of its new HAN BEV which drove total EV +45%y/y...  Surprised no one is talking about it here... Perhaps one day it will get a TSLA like multiple as it is in many ways ahead of them...

 

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

Bloomberg

 

News Story

 

10/13/2020 00:10:32 [YIC] China Business News

 

China's BYD Dreams Bigger by Expecting Double Profit Over Three Quarters (Yicai Global) Oct. 13 -- Chinese automaker BYD has hiked its profit growth forecast for the first three quarters of this year due to a strong rebound in new energy vehicle sales.

 

Net profit could rise as much as 129 percent to a point between CNY3.4 billion and CNY3.6 billion (up to USD533.6 million) amid the country's improving control over the Covid-19 epidemic, the Shenzhen-based company said in a statement yesterday. It had previously suggested as high as a 91 percent profit jump.

 

Two models should mainly drive the growth. BYD's new flagship brand Han has become a bestseller in the domestic high-end NEV market while the firm's redesigned flagship model Tang has also sold well.

 

Last month, BYD sold 42,200 vehicles, an increase of 4 percent from a year earlier. Meanwhile, NEV sales surged 45 percent to 19,900 units.

 

But volume was still down. Over the first nine months, the firm sold 269,000 units, 20 percent down from a year ago. NEV sales slid 42 percent to 110,900 units. But the declines were narrower than those of the eight months ended in August.

 

The company has diversified its business to enhance profitability. Its mobile phone components and assembly business has garnered more major clients while shipments of smart products have increased. The firm didn't mention how its face mask business was performing.

 

 

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One has to actually do the due dilligence to see what the core reasons are for profit inconsistency and whether it implies the business is "unhealthy" or not.  Complex stories in fact deter most who want the simple and obvious, which also means investing at an expensive price...  This is a value investing board so I do expect more... Value isnt high ROE, or frankly any of the "value metrics" low P/B, or low P/E or high FCF yield etc.  that is too obvious and simple and very dead.  Computers can do that and have squeezed out all of the juice of that lemon.  That wasnt really value investing but was just simply inequitable information distribution...

 

BYD is expanding across Li batteries, EV cars, car assembly, EV busses, Power grid, etc.  These are the minimum table stakes to reach the ultimate end state beyond the legacy archaic fossil fuel/power plant ecosystem.  While it does take time, money, and sweat/tears to develop, the fruits of the labor will be clearly apparent as will the huge moat.... But of course by then  it wont be a "value" stock anymore...

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One has to actually do the due dilligence to see what the core reasons are for profit inconsistency and whether it implies the business is "unhealthy" or not.  Complex stories in fact deter most who want the simple and obvious, which also means investing at an expensive price...  This is a value investing board so I do expect more... Value isnt high ROE, or frankly any of the "value metrics" low P/B, or low P/E or high FCF yield etc.  that is too obvious and simple and very dead.  Computers can do that and have squeezed out all of the juice of that lemon.  That wasnt really value investing but was just simply inequitable information distribution...

 

BYD is expanding across Li batteries, EV cars, car assembly, EV busses, Power grid, etc.  These are the minimum table stakes to reach the ultimate end state beyond the legacy archaic fossil fuel/power plant ecosystem.  While it does take time, money, and sweat/tears to develop, the fruits of the labor will be clearly apparent as will the huge moat.... But of course by then  it wont be a "value" stock anymore...

 

Could you elaborate on the huge moat?

 

Off topic, but I’m not sure about that computers have squeezed the juice out of the value metric lemon. There are plenty of low p/BV, high fcf stocks out there. They haven’t been discovered by computers or the price gaps would have gone. They just haven’t been bought by all the etfs.

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TIL buying a company with a high ROE and a low P/E is "dead" and "not value" and "discovered by computers".

 

I guess the computers missed Mastercard in 2010 when it was growing at 20%/yr and trading for 16x earnings and Apple in 2015 was trading for 10x earnings with a nearly infinite ROE, etc.

 

No, it's not computers, it's still judgment. Computers don't know the difference between Apple at 10x earnings and FOSL at 10x earnings and why they're different. Some money managers don't either but some do.

 

anyways, BYD.

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I think it's a story as much as a numbers game with this one... You would have a hard time valuing any business that is looking to grow revenue 10x from 2017-2025 as they are borrowing and investing most of their earnings into capacity expansion at home and abroad that will take some time to pay off.

 

If you look at it very simply it is the lowest cost provider of 3 rapidly growing markets EV's, energy storage, battery manufacture. They are also lead by an outstanding CEO in Wang Chuan Fu. If you look at Mr. Fu's history he has been out in front of all of these segments, and what they have done in the auto manufacturing space is insane, reminds me of SpaceX. They make 100% of the components that go into there vehicles, completely vertically integrated. They manufacture all their own batteries and will likely spin that business of in the near term to provide EV batteries to many other auto manufacturers. They own 2 Lithium mines, before it was a cool thing to do :) BYD has looked up and down the line at all the segments they are in and done a really great job of eliminating excess.

 

They will also be a (or thee) major competitor in the E-Truck/Bus/Forklift market which plays well for BYD as these are far more commodity markets than consumer auto's.

 

I am a big fan of this company, its a large position but I have not been adding of late, you have to ask yourself if 120x depressed 2020 earnings is a bargain, and none of the numbers will give you that IMHO.

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  • 3 weeks later...

www.wsj.com/articles/buffett-backed-byd-sells-3-9-billion-of-shares-as-ev-stocks-electrify-11611214278

 

BYD Co. , a Chinese car maker backed by Warren Buffett, raised $3.9 billion from a stock sale, joining peers in capitalizing on investors’ bullishness about new-energy vehicles.

 

The deal marks BYD’s biggest equity financing since it listed in Hong Kong in 2002. The company, whose stock also trades in Shenzhen, makes electric cars, batteries, plug-in hybrids and fossil-fuel-powered vehicles.

 

Investor enthusiasm about green cars and breakthroughs in battery technology have sent the company’s stock soaring, making it more attractive for BYD to raise new funds. BYD stock in Hong Kong has more than quintupled in a year, giving it a market capitalization of $91 billion. That is roughly in line with NIO Inc., a newer Chinese rival, and compares to an $806 billion market cap for Tesla Inc., according to FactSet.

 

Other electric-car makers have also tapped equity markets for funds as they race to secure a bigger slice of the growing sector. Chinese competitor Xpeng Inc. in December raised $2.5 billion from a follow-on offering of American depositary receipts, while NIO has raised more than $4.5 billion in December and January by selling ADRs and convertible bonds.

 

A unit of Warren Buffett’s Berkshire Hathaway Inc. has held a stake in BYD since 2008. As of June 2020, Berkshire held 8.25% of BYD, or nearly 25% of its Hong Kong-listed stock, according to BYD’s half-year report.

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