Berkshire Hathaway, led by Warren Buffett, has once again sold shares of the Chinese electric vehicle company BYD.
According to local media such as China Securities Journal on the 26th, Berkshire recently sold 2.53 million shares of BYD listed on the Hong Kong stock market. The sale amounted to approximately 675.8 million Hong Kong dollars (about 112.8 billion Korean won). After this sale, Berkshire Hathaway's BYD shareholding decreased to 9,863,100 shares, with the stake dropping from nearly 20% to 8.98%.
Buffett began purchasing BYD shares in September 2008. During the financial crisis, he bought 225 million shares of BYD at 8 Hong Kong dollars per share. Based on the closing price on the 26th (245.6 Hong Kong dollars), the value is estimated to have increased about 32 times. BYD's stock price surged sharply from 2020 due to the rapid growth of the Chinese electric vehicle market.
However, since August last year, including this sale, Buffett has sold shares 12 times. The market views this as Buffett disposing of BYD shares due to concerns about the future of the automobile industry. In fact, at Berkshire Hathaway's annual shareholders meeting held last month in Omaha, Nebraska, Buffett's hometown, he mentioned, "I have felt that the automobile industry has been very difficult for a long time." He also emphasized, "There are competitors worldwide, but just because you were once a winner does not mean you will always be a winner."
In April, Buffett also stated in an interview with CNBC that Berkshire would not rush to sell its BYD stake but would "look for better investment opportunities."
BYD recorded revenue of 120.173 billion yuan (about 21.678 trillion Korean won) and a net profit of 4.13 billion yuan in the first quarter of this year. Although these figures represent increases of 79.83% and 410.89% year-on-year respectively, they decreased by 23.1% and 43.5% compared to the fourth quarter of last year.
As the growth of electric vehicle sales in China has recently slowed, the government has stepped up support by extending tax reduction measures for new energy vehicle purchases until 2027. The policy includes a 100% purchase tax exemption for new energy vehicles bought until the end of 2025, and a 50% exemption from 2026 to 2027. China has exempted purchase taxes on new energy vehicles since 2017 to foster the industry. Originally scheduled to end at the end of 2020, the benefit has been extended four times due to the COVID-19 pandemic.
Meanwhile, the Chinese automobile industry expects new energy vehicle sales in China to reach 8.5 to 9 million units this year and increase to 12 million units by 2025.
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