Several investment banks and brokerages, including Nomura and Haitong International Securities, are maintaining a “buy” rating on BYD Co. Ltd. (01211.HK), saying they don’t see any clear reason why the electric-vehicle maker’s shares plunged on Thursday.
Nomura noted that there is no change in BYD’s business fundamentals or the Chinese government’s policy on e-buses.
There has been some speculation that the selloff was triggered by a possible divestment by a key shareholder.
Meanwhile Rebecca Tang, an analyst at Haitong International Securities, said BYD’s “valuation has become more attractive after the selloff”.
She is keeping a buy call as she expects demand for pure electric buses to remain strong in 2015, based on BYD’s order backlog.
The Chinese electric vehicle maker’s share price plunged as much as 47 percent at one point on Thursday, triggering all sorts of rumors.
The company later said that its business operations are proceeding as usual, and that there has not been any substantial change in its fundamentals and the internal and external operational environments.
In a stock-exchange filing early Friday, BYD said Berkshire Hathway Inc., the investment vehicle of US billionaire Warren Buffett, had confirmed that it has neither sold the Chinese electric-vehicle maker’s shares recently, nor has any intention currently to reduce its shareholding in the company.
In another Friday filing, BYD dismissed rumors that it suffered substantial foreign exchange losses from its Russian business, or seen a notable decrease in customer orders.
The Russian ruble’s recent slide hasn’t affected BYD much, the company said, pointing out that its business in Russia is all denominated in the US dollar and that the exposure amounts to less than US$1 million in total.
In addition, company secretary Qian Li said in a telephone conference late Thursday that rumors about BYD’s chairman Wang Chuan-fu being detained are “ridiculous”. He also said that Wang and other top officials have not reduced their holdings in the company shares.
BYD has forecast 7 billion yuan (US$1.13 billion) of sales from new-energy vehicles this year. It reported 2.72 billion yuan revenue from the sale of such vehicles in the first half, 12.2 times the level a year ago. The amount represented 10.8 percent of the company’s total income for the period.
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