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BYD surges 10% on private placement plan
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SHARES of BYD Co, world's largest rechargeable battery supplier, surged by hitting the 10 percent daily limit in Shenzhen today as it plans to raise 15 billion yuan (US$2.4 billion) in A-share replacement to invest in Lithium-ion batteries and green vehicles.
The Shenzhen-based company, also the biggest domestic automakers for electric vehicles, jumped to 83.6 yuan in Shenzheng Stock Exchange today.
The Shenzhen and Hong Kong-listed company will issue up to 261 million new A-shares in Shenzhen, which will represent 9.6 percent of the firm's enlarged share capital, at 57.4 yuan per share, according to its filing to stock exchanges on Thursday.
BYD said it will invest 6 billion yuan in expanding production of rechargeable Lithium-ion batteries, and 5 billion yuan in the research and development of hybrid and electric cars. The rest 4 billion yuan will be used for working capital and to repay bank loans.
"Our battery supply is insufficient in terms of an upcoming booming green vehicle industry," BYD said. "The A-shares issue may support the yield increase and establish a stable and sustainable foundation for the company’s future growth."
BYD will expand in a speed of 6 gigawatt hours a year on its battery capacity, and reach a yearly operation of 34 gigawatt hours a year in the future, the company said.
Deng Xue, an analyst at Haitong Securities, raised BYD's target price to 100 yuan per share in six months from 81 yuan per share on Thursday, as it sees optimistic on BYD's expanding market share of domestic hybrid and electric vehicles.
"Sales of BYD's electric vehicles are expected to rose 190 percent to 22 billion yuan in 2015," Deng said, "As the company to launch more electric models in the peak season, we see the company to continue expanding in the industry in a longer term."
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