BYD Discounted Fundraising 4.2 Bil HKD for New Energy Car Development

On 23 May, BYD has suspended its SSE stock and HSE stock because of important announcement. Price of SSE and HSE of BYD has ended with 42.16 CNY and 41.15 HKD respectively.

“There will be good news later, because of new energy automobile segment development are beyond expectation.” relative staff of BYD tell reporter during interview.

The good news is BYD has signed contract with its agent. It will place about 4.27 billion HKD HSE shares with discounted price of 35 HDK per share, which is about 14.95% discount. BYD announces that all the fund shall be invested into new energy automobile development.

As reporter known, the placement aims non-relevant person. Therefore, Buffett is not included. Besides, stock of BYD will back to market today.

On May 23, stock of BYD starts from 41.85 HKD, and then fluctuation with downtrend. The stock has suspended in the afternoon with 41.15 HKD. The company announces that BYD has singed contract with its agent about placement agreement. According to the agreement, BYD will publish 120 million shares of HSE stock. With 35 HKD per share, the entire placement mounts to 4.27 billion HKD. The placement equals to 15.37% of the entire 793 million HSE shares in market, and takes about 5.18% of total published shares.

BYD places shares for more than 6 placees by its placement agent. Placee is the investor who has no concern with BYD and its relevant organizations. Besides, the placees shall not become the main shareholders after the placement.

As reporter known, BYD has not initialed any fund activities in the past 12 months. The above relevant staff of BYD tells reporter that there are some rumor about placement already in market. The reason BYD chooses this period is because of Chinese public policy for new energy automobile is clear, and BYD commercial mode over public transportation is finished, besides electronic bus thirsty demand.

Analyst points out that the placement is more than expectation before. The good news is based on some hedge fund longs BYD. Besides, price of BYD recovery builds good background for the recovery. According to statistics, operating income of BYD of year 2013 is 49.7 billion CNY, which has increased 12.14%. Earning for stock holders is 553 million CNY, which has increased 579%. Automobile business takes about 51% of the entire operating income.