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BYD Secures Major Funding Amid Global Expansion & EV Boom: Buy Now?
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BYD Co. (BYDDY - Free Report) has raised $5.59 billion in a primary share sale, marking the largest such deal in Hong Kong in four years. It had initially planned on selling 118 million shares but then increased the offering to 129.8 million shares, reflecting strong investor demand. The shares were priced at a 7.8% discount to the closing price of HK$363.60 on Monday.
This deal is the largest equity follow-on offering in the global automotive sector in the past decade. It highlights the growing confidence in the Chinese auto sector. One of the key investors in the BYD share sale was the Al-Futtaim Family Office, based in the United Arab Emirates. This aligns with BYD’s strategy to expand its international footprint, as many Chinese automakers are looking to boost sales in the Middle East. The market size, however, remains relatively small compared to China’s domestic EV market.
In 2024, over 90% of BYD’s 4 million vehicle sales were from China, where it holds a dominant market share in pure electric and plug-in hybrid vehicles. With this capital raise, the company aims to improve its research and development, expand overseas operations and strengthen its financial position.
In the trailing 12 months, BYDDY shares have skyrocketed 91.6%, outperforming the Zacks Auto, Tires and Trucks sector’s dip of 2.8% and the Zacks Automotive – Foreign industry’s deline of 30%. The S&P 500 index has risen 16.2% in the same time frame.
BYD shares are riding on several tailwinds that are strengthening the company’s position in the China and global automotive market. China’s supportive policies for the EV industry are working in BYD’s favor.
One-Year Performance
Image Source: Zacks Investment Research
The China government has been offering subsidies and incentives to boost EV adoption, benefiting companies like BYD, Li Auto, Xpeng and NIO. Furthermore, lower raw material costs, especially for lithium used in batteries, have helped reduce production expenses and improve margins.
BYD is also capitalizing on technological advancements, such as its Blade Battery technology, which provides greater safety, durability and efficiency compared to traditional lithium-ion batteries. The automaker’s ‘God’s Eye’ smart driving system, launched just last month, is enhancing its vehicles’ autonomous driving and AI capabilities, as the global EV competition is shifting its focus to smart driving. Similar offerings by BYD’s competitors are Tesla’s Full Self-Driving (FSD) and Geely Automobile’s (GELYY - Free Report) G-Pilot, which was launched on March 3.
On the global front, BYD is benefiting from increasing international demand for affordable EVs. It has aggressively expanded into Europe, Latin America and Southeast Asia, with Brazil emerging as its largest overseas market in 2024.
BYD is targeting between 5 million and 6 million vehicle sales in 2025, which would put it on par with General Motors (GM - Free Report) and Stellantis. The company is also investing in new production facilities and hiring more employees, with its workforce nearing 1 million people, surpassing Toyota and Volkswagen.
The Zacks Consensus Estimate for BYD’s 2025 revenues is currently pegged at $128.04 billion, suggesting year-over-year growth of 20.54%. The consensus mark for the company’s 2025 EPS is currently pegged at $4.90, up by 2.9% over the past 30 days and indicating year-over-year growth of 26.79%.
Conclusion
BYD’s record-breaking share sales and strong market performance highlight investor confidence in its growth trajectory, driven by technological advancements, global expansion and supportive EV policies. With ambitious sales targets, the company is poised to compete with global auto giants and solidify its position in the EV industry.
BYDDY currently has a Zacks Rank #2 (Buy), suggesting that it may be wise for investors to start accumulating the stock now.
Other Key Picks
Some other top-ranked stocks in the auto space are Geely Automobile, General Motors and Zapp Electric Vehicles Group Limited . GELYY flaunts a Zacks Rank #1 (Strong Buy) at present, and GM and ZAPP carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s 2025 EPS is currently pegged at $3.59, unchanged over the past 30 days and suggesting growth of 149.31% on a year-over-year basis.
The Zacks Consensus Estimate for GM’s 2025 earnings has moved north 6.7% over the past 30 days and suggests year-over-year growth of 8.02%. It is currently pegged at $11.45 per share.
The Zacks Consensus Estimate for ZAPP’s 2025 loss has been steady at 84 cents per share over the past 30 days and suggests growth of 67.2% on a year-over-year basis.
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BYD Secures Major Funding Amid Global Expansion & EV Boom: Buy Now?
BYD Co. (BYDDY - Free Report) has raised $5.59 billion in a primary share sale, marking the largest such deal in Hong Kong in four years. It had initially planned on selling 118 million shares but then increased the offering to 129.8 million shares, reflecting strong investor demand. The shares were priced at a 7.8% discount to the closing price of HK$363.60 on Monday.
This deal is the largest equity follow-on offering in the global automotive sector in the past decade. It highlights the growing confidence in the Chinese auto sector. One of the key investors in the BYD share sale was the Al-Futtaim Family Office, based in the United Arab Emirates. This aligns with BYD’s strategy to expand its international footprint, as many Chinese automakers are looking to boost sales in the Middle East. The market size, however, remains relatively small compared to China’s domestic EV market.
In 2024, over 90% of BYD’s 4 million vehicle sales were from China, where it holds a dominant market share in pure electric and plug-in hybrid vehicles. With this capital raise, the company aims to improve its research and development, expand overseas operations and strengthen its financial position.
In the trailing 12 months, BYDDY shares have skyrocketed 91.6%, outperforming the Zacks Auto, Tires and Trucks sector’s dip of 2.8% and the Zacks Automotive – Foreign industry’s deline of 30%. The S&P 500 index has risen 16.2% in the same time frame.
BYD shares are riding on several tailwinds that are strengthening the company’s position in the China and global automotive market. China’s supportive policies for the EV industry are working in BYD’s favor.
One-Year Performance
Image Source: Zacks Investment Research
The China government has been offering subsidies and incentives to boost EV adoption, benefiting companies like BYD, Li Auto, Xpeng and NIO. Furthermore, lower raw material costs, especially for lithium used in batteries, have helped reduce production expenses and improve margins.
BYD is also capitalizing on technological advancements, such as its Blade Battery technology, which provides greater safety, durability and efficiency compared to traditional lithium-ion batteries. The automaker’s ‘God’s Eye’ smart driving system, launched just last month, is enhancing its vehicles’ autonomous driving and AI capabilities, as the global EV competition is shifting its focus to smart driving. Similar offerings by BYD’s competitors are Tesla’s Full Self-Driving (FSD) and Geely Automobile’s (GELYY - Free Report) G-Pilot, which was launched on March 3.
On the global front, BYD is benefiting from increasing international demand for affordable EVs. It has aggressively expanded into Europe, Latin America and Southeast Asia, with Brazil emerging as its largest overseas market in 2024.
BYD is targeting between 5 million and 6 million vehicle sales in 2025, which would put it on par with General Motors (GM - Free Report) and Stellantis. The company is also investing in new production facilities and hiring more employees, with its workforce nearing 1 million people, surpassing Toyota and Volkswagen.
The Zacks Consensus Estimate for BYD’s 2025 revenues is currently pegged at $128.04 billion, suggesting year-over-year growth of 20.54%. The consensus mark for the company’s 2025 EPS is currently pegged at $4.90, up by 2.9% over the past 30 days and indicating year-over-year growth of 26.79%.
Conclusion
BYD’s record-breaking share sales and strong market performance highlight investor confidence in its growth trajectory, driven by technological advancements, global expansion and supportive EV policies. With ambitious sales targets, the company is poised to compete with global auto giants and solidify its position in the EV industry.
BYDDY currently has a Zacks Rank #2 (Buy), suggesting that it may be wise for investors to start accumulating the stock now.
Other Key Picks
Some other top-ranked stocks in the auto space are Geely Automobile, General Motors and Zapp Electric Vehicles Group Limited . GELYY flaunts a Zacks Rank #1 (Strong Buy) at present, and GM and ZAPP carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for GELYY’s 2025 EPS is currently pegged at $3.59, unchanged over the past 30 days and suggesting growth of 149.31% on a year-over-year basis.
The Zacks Consensus Estimate for GM’s 2025 earnings has moved north 6.7% over the past 30 days and suggests year-over-year growth of 8.02%. It is currently pegged at $11.45 per share.
The Zacks Consensus Estimate for ZAPP’s 2025 loss has been steady at 84 cents per share over the past 30 days and suggests growth of 67.2% on a year-over-year basis.