BYD Defends Stock Price with 400 Million Yuan Share Buyback...

Global largest electric vehicle manufacturer BYD is conducting a share buyback worth 400 million yuan (approximately 73.7 billion KRW). This move aims to defend against the continued stock price decline caused by concerns over the slowdown in growth of the Chinese electric vehicle market.

BYD announced on the 6th that after the mainland market closes, it plans to repurchase at least 1.48 million shares (A-shares) using its cash reserves, with the purchase price not exceeding 270 yuan per share. The repurchased shares will be canceled to enhance the per-share value.

[Image source=Reuters Yonhap News]

In documents submitted to the Hong Kong and Shenzhen stock exchanges, BYD explained that this share buyback is "to protect the interests of all shareholders, strengthen investor confidence, and stabilize and enhance the company's value." The share buyback plan will be completed within 12 months after obtaining shareholder approval.

Previously, BYD Chairman Wang Chuanfu announced a share buyback plan worth 200 million yuan, but the actual repurchase scale has now been doubled. SCMP mentioned that this response comes amid a weak stock market for Chinese companies due to capital outflows following successive US interest rate hikes and concerns over delayed economic recovery in China.

Due to the expansion of electric vehicle adoption and the cessation of subsidies, the growth rate of the Chinese electric vehicle market has started to slow compared to previous years. Last year, China's electric vehicle growth rate was 21%, sharply down from 74% the previous year.

BYD delivered 3.02 million pure electric and plug-in hybrid vehicles last year, an increase of 62.3% compared to the previous year. Last year's net profit ranged from 29 billion to 31 billion yuan, representing a 74.5% to 86.5% increase from 2022. However, compared to the previous explosive momentum, the growth rate appears somewhat slowed. The stock price, which was above 300 yuan on the Shenzhen Stock Exchange earlier last year, has also fallen to 191 yuan (closing price on the 6th), reflecting this impact.

BYD has recently launched a price reduction offensive. BYD announced that the local selling price of the entry-level electric vehicle Seagull is 69,800 yuan, and the new model price of the crossover vehicle "Atto 3," one of its best-selling models, is 119,800 yuan. These prices are 5% and 11.8% lower than the previous models, respectively.