Chinese electric vehicle (EV) giant BYD has secured a substantial $5.6 billion (HK$43.5 billion) through a share placement in Hong Kong, marking the city’s largest such offering in nearly four years. Despite the significant capital raise, BYD’s shares experienced a temporary downturn.
According to a stock exchange filing, BYD sold 129.8 million shares at HK$335.20 each. Notably, the United Arab Emirates-based Al-Futtaim Family Office participated in the placement, with both companies announcing plans for a strategic partnership. The specific amount invested by Al-Futtaim was not disclosed.
BYD intends to utilize the newly acquired funds to accelerate its global expansion, invest in research and development (R&D), bolster its working capital, and support general corporate initiatives.
This financial maneuver follows a period of robust performance for BYD. The company reported sales of over 318,000 pure electric and hybrid passenger vehicles in the previous month, representing a remarkable 161% year-over-year increase. Moreover, overseas sales reached a record 67,025 units.
In recent developments, BYD announced the integration of its “God’s Eye” autonomous-driving system into at least 21 EV models, free of charge. The company also unveiled an innovative on-vehicle drone system in collaboration with Chinese drone manufacturer DJI.
Following the share placement announcement, BYD’s stock price declined by 7.04%, reaching HK$338.40. However, it’s important to note that BYD’s shares have surged 46% in Hong Kong since their January low, contrasting sharply with Tesla’s 29% decline over the same period.
The recent surge in fundraising by Chinese companies is attributed to a renewed investor confidence, fueled by breakthroughs in artificial intelligence and positive signals from government interactions with entrepreneurs.
Analysts remain optimistic about BYD’s long-term prospects. Morningstar projects annual revenue and earnings growth rates of 16% and 25%, respectively, from 2023 to 2028. “We have long been bullish on the company’s overseas potential,” stated Eunice Lee, a senior analyst at Bernstein.
BYD at a Glance
Year founded: 2003 Headquarters: Shenzhen, Guangdong, China Production output: 4,304,073 vehicles (2024)
