Recently, BYD announced that its Chairman and CEO, Wang Chuanfu, proposed that the company use its own funds of 200 million yuan to repurchase some of its A-shares through centralized bidding.
The official reason given by BYD for this repurchase is primarily based on Wang Chuanfu's confidence in the prospects of the new energy industry under the national "dual-carbon" goals and the future development of the company, as well as recognition of the company's value. The repurchased shares will be used for employee stock ownership plans, equity incentive plans, or reducing registered capital.
In the current new energy market, BYD is undoubtedly in a "leading" position. After breaking through 300,000 units in October, a target for the full year, the company is accelerating toward its annual goal. Despite a series of price discounts in November amid a generally sluggish domestic market, BYD still maintained a monthly sales volume of over 300,000 units.
From January to November 2023, BYD's cumulative sales reached 2.672 million units. To achieve the annual sales target of 3 million, the December sales need to reach 328,000 units.
BYD's financial data is also impressive. In the first three quarters of this year, cumulative revenue reached 422.3 billion yuan, a year-on-year increase of 57.75%. Cumulative net profit was 21.37 billion yuan, a year-on-year increase of 129.47%. The gross profit margin and net profit margin reached 19.79% and 5.29%, respectively, both hitting new highs.
However, it's embarrassing that while sales continue to rise due to price stimulation, stock prices are continuously falling. Since reaching its highest stock price of 304.99 yuan/share in February, it has now fallen to below 200 yuan/share (as of December 7). In November, a month of record-high sales, the stock price fell by more than 10%.
In addition, Warren Buffett, known as the "Stock God," persistently reduced his holdings in BYD at the end of October, conducting 13 reductions within 14 months, and his ownership stake is now below 8%. Therefore, it is widely believed that Wang Chuanfu's proposal for repurchase is more about boosting investor confidence.
