BYD Company Limited and BYD Electronic Company
BYD Company Limited (HKSE:01211, Financial), together with its subsidiaries, engages in the rechargeable battery and photovoltaic, handset components and assembly, and automobile businesses worldwide. We first heard about the story of Wang Chuanfu, a person who combines two traits that are extremely rare in business: a brilliant chemist with a great business acumen. So, we kept track of the two companies that he founded –– BYD Company Limited and BYD Electronic Company (HKSE:00285, Financial). The latter is an investment holding company that manufactures, assembles, and sells mobile handset components and modules. As it happens in the stock market, we felt that at some point in time, his two companies would fall out of favor and a buying opportunity may present itself with an undervalued price. The opportunity came in late 2011 and in 2012, we were able to buy 250,000 shares of BYD Company Limited at $11.70 HKD per share and one million shares of BYD Electronic Company at $1.58 HKD per share. You would not believe that we bought BYD Electronic at a discount to its net-net working capital. Both have worked out well since our purchase. On December 31, 2020, BYD Company Limited and BYD Electronic Company were trading at $203.20 HKD and $40.60 HKD per share, respectively.
From Francis Chou (Trades, Portfolio)'s Chou Asia Fund annual 2020 shareholder letter.
