BYD is planning on entering the U.S. market within the year and is contracting with the city of Los Angeles on building electric buses for the city. The company has seen exceptional growth in China as China recently passed the U.S. in automobile sales, but future growth is expected to diminish significantly. This news has clearly evidenced itself in the share of BYD (1211.hk on Yahoo Finance) as the stock has slowly fallen from a peak of $85 in October of 2009 to $39 today.
Warren Buffett was quoted early last year in saying any future share purchases would be contingent on the price. The stock is still trading at a lofty p/e of 19.55, but is down significantly since the time of Buffett’s comments.
Unfortunately the financials for 2010 are yet to be released so I was forced to go off the 2009 annual report published by the company. The figures were also quoted in the Chinese Renminbi so I converted them back to dollars at 1 Renminbi = $.152 USD.
I also had difficulty determining the market capitalization of the firm. It is quoted at 30.16 billion on Yahoo Finance, but it isn’t specified if that’s in USD of HKD. Berkshire Hathaway’s 9.89% stake was quoted at around $2 billion at the end of 2009 so I went off that figure to calculate a $11.2 billion market cap given the falloff over the year. Given the growth in earnings, the 2010 values should show a larger discount to these values.
Figures from the 2009 Annual Report. Numbers are in ‘000 USD
Assets = $6,191,811
Liabilities = 3,299,687
Equity = $2,892,123
Debt/Equity = 1.14
Return On Equity = 21.43%
Times Interest Earned = 18.655
Free Cash Flow Yield = 8%
Price To Book = 6.91
Cash Flow From Operations = $1,826,463
Free Cash Flow = $945,362
Revenues = $5,999,357
Cost Of Revenues = $4,697,518
Interest Expense = $38,819
Net Earnings = $619,923
The financials for 2009 can be found here
Disclosure: No holdings in BYD