New share plan drives BYD 10% higher
Print Edition
SHARES of BYD Co, the world’s largest rechargeable battery supplier, surged by the 10 percent daily limit in Shenzhen yesterday as it plans to issue new A shares to raise 15 billion yuan (US$2.4 billion) and “establish a stable and sustainable foundation for the company’s future growth.”
BYD, the biggest domestic maker of electric vehicles, jumped to 83.60 yuan on the Shenzhen Stock Exchange yesterday.
The Shenzhen and Hong Kong-listed company will issue up to 261 million new A shares in Shenzhen, representing 9.6 percent of BYD’s enlarged share capital, at 57.40 yuan per share, the company said in a stock exchange filing yesterday.
BYD said it will invest 6 billion yuan in expanding production of rechargeable lithium-ion batteries to meet demand for green vehicles, and 5 billion yuan in research and development of hybrid and electric cars. The remaining 4 billion yuan will be used for working capital and to repay bank loans.
BYD said the issuance of yuan-denominated A shares aims to “establish a stable and sustainable foundation for the company’s future growth.”
Deng Xue, an analyst at Haitong Securities, raised BYD’s target price to 100 yuan per share in six months as the brokerage is optimistic about the company’s expanding share for hybrid and electric vehicles domestically.
“BYD’s electric vehicle sales are set to rise 190 percent to 22 billion yuan in 2015,” he said.
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