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Berkshire Hathaway-Backed BYD’s Stock Continues to Rocket Skyward

(BRK.A), (BRK.B)

Shares of Berkshire Hathaway-backed Chinese battery and vehicle manufacturer BYD Co., Ltd. have continued to rocket upward, jumping 11.5% on Thursday.

BYD’s stock (BYDDF), which had been as low as $4.35 on March 23, hit $21.30 on intraday trading before closing at $20.60.

The company has had strong demand for its Han EV luxury automobile, which debuted in July and sold 4,000 units in August.

BYD is the world leader in electric buses. BYD recently secured Finland’s largest eBus order – 106 vehicles for Nobina, one of Scandinavia’s largest public transport operators.

The company also manufactures EV batteries, a market that is projected to grow at a CAGR of 22% over the next five years.

A Profitable EV Company

BYD recently reported a net profit of 1.66 billion yuan (roughly 242 million U.S. dollars) for the first half of 2020. The net profit rose 14.29 percent over the same period in 2019.

Through June 30, BYD had revenue of 60.5 billion yuan, down 2.7 percent year on year, according to BYD’s financial report filed with the Shenzhen Stock Exchange.

Despite the global pandemic, BYD projects 2.8 billion yuan to 3 billion yuan of net profit in the first three quarters of this year, which would be an increase of 77.86 percent to 90.56 percent from the same period of 2019.

BYD and Berkshire Hathaway

In 2008, Berkshire Hathaway bet on BYD’s potential, purchasing 225 million shares. It’s an investment that has paid off handsomely. Berkshire’s original investment of $230 million has grown in value twenty-fold.

© 2020 David Mazor

Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway and BYD, and this article is not a recommendation on whether to buy or sell a stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.