BYD plans 10 billion yuan stock sale in bull market
BYD Co. plans to raise 10 billion yuan ($1.61 billion) in a private A-share placement, people familiar with the matter said, amid a stock-market rally in which the company's Shenzhen-traded shares have almost doubled in value this year.
BYD is working with banks such as China International Capital Corp., China Merchants Securities Co., Guosen Securities Co. and UBS Group AG on the plan, said sources who asked not to be named.
The size of the stock offering hasn't been finalized and is subject to change, the people said. BYD spokeswoman Sherry Li declined to comment.
'Perfect sense'
The company, which counts Warren Buffett's Berkshire Hathaway Inc. as a shareholder, joins the rush of Chinese companies tapping the equity market. They have announced $116 billion of secondary stock offerings in 2015, a figure that UBS Group AG predicts will increase to a record $161 billion by December.
"It makes perfect sense to go ahead with a share placement now, given the rally in the market," said Harry Chen, an analyst at Guotai Junan Securities Co. in Shenzhen. "BYD needs to boost investment in areas such as battery manufacturing, which has been a bottleneck for its vehicle assembly."
BYD has halted trading of its Hong Kong and Shenzhen shares pending an announcement for a private placement.
U.S. orders
BYD projected more orders for electric buses after winning its largest U.S. contract for the vehicles from a mass-transit operator last month.
It also plans to start taking orders for electric trucks from overseas buyers in the second half of the year and begin deliveries in 2016, with the U.S. being one of the likely first destinations, the company said.
BYD's share-sale plan follows that of Lifan Industry Group Co. and Chongqing Changan Automobile Co.
Lifan, of Chongqing, announced plans to raise up to 5.2 billion yuan in a private placement. Likewise, Changan Auto said last month it plans to raise 6 billion yuan in a private share sale.
The size of the stock offering hasn't been finalized and is subject to change, the people said. BYD spokeswoman Sherry Li declined to comment.
'Perfect sense'
The company, which counts Warren Buffett's Berkshire Hathaway Inc. as a shareholder, joins the rush of Chinese companies tapping the equity market. They have announced $116 billion of secondary stock offerings in 2015, a figure that UBS Group AG predicts will increase to a record $161 billion by December.
"It makes perfect sense to go ahead with a share placement now, given the rally in the market," said Harry Chen, an analyst at Guotai Junan Securities Co. in Shenzhen. "BYD needs to boost investment in areas such as battery manufacturing, which has been a bottleneck for its vehicle assembly."
BYD has halted trading of its Hong Kong and Shenzhen shares pending an announcement for a private placement.
U.S. orders
BYD projected more orders for electric buses after winning its largest U.S. contract for the vehicles from a mass-transit operator last month.
It also plans to start taking orders for electric trucks from overseas buyers in the second half of the year and begin deliveries in 2016, with the U.S. being one of the likely first destinations, the company said.
BYD's share-sale plan follows that of Lifan Industry Group Co. and Chongqing Changan Automobile Co.
Lifan, of Chongqing, announced plans to raise up to 5.2 billion yuan in a private placement. Likewise, Changan Auto said last month it plans to raise 6 billion yuan in a private share sale.
