Mega BYD share sale aims to raise $40.7b

Bloomberg

Chinese electric vehicle maker BYD (1211) is aiming to raise as much as HK$40.7 billion in what would be Hong Kong's biggest share sale in nearly four years.

The company is offering 118 million shares at HK$333 to HK$345 each, according to terms of the deal seen by Bloomberg News. That implies a discount of up to 8.4 percent to BYD's closing price yesterday, according to Bloomberg calculations.

The transaction marks Hong Kong's biggest share sale since food-delivery firm Meituan (3690) raised US$10 billion (HK$78 billion) in 2021 through a combination of a top-up placement and convertible bonds. BYD's deal also reinforces expectations that Chinese share sales are primed for a rebound after years of decline.

The fresh capital could support BYD's global expansion as it looks to localize production in several places around the world in order to bypass tariffs being levied on China-made EVs. Executive Vice President Stella Li Ke said last week that BYD wants to build a third factory in Europe and a decision on a possible location may come in the next year and a half.

BYD is likely looking to capitalize on the rally in its shares, which have surged 46 percent in Hong Kong since its January low. This is in sharp contrast with Tesla's 26 percent decline over the same period.

BYD aims to deliver 5 million to 6 million EVs and hybrids this year, up from 4.27 million in 2024. The company finished the year as the seventh-biggest car group by sales globally, data compiled by Bloomberg shows.

Still, it fell short of surpassing Tesla as the biggest seller of pure EVs globally in 2024 by less than 25,000 units. However, BYD is set to leapfrog the company in annual revenue, on track to exceed US$100 billion in sales for the first time in 2024.