BYD Co. Ltd. (HKSE:01211, Financial)(SZSE:002594, Financial), the Chinese electric vehicle backed by Berkshire Hathaway Inc. (BRK.A, Financial)(BRK.B, Financial) CEO Warren Buffett (Trades, Portfolio), disclosed this week March battery-powered vehicle sales that outshined March vehicle sales of rivals like Nio Inc. (NIO, Financial) and Xpeng Inc. (XPEV, Financial).
The Shenzhen, Guangdong-based vehicle manufacturer said March electric vehicle sales totaled 16,301 units, topping Nio's 7,257 units and Xpeng's 5,102 units.
BYD said revenue for 2020 was approximately 156.6 billion yuan ($23.96 billion), up approximately 26% year over year on automobile revenue growth of approximately 37.66% year over year. The company discussed that its flagship models, including the Han sedan and Tang SUV, drove sales volume during the year on strong customer favor and demand.
GuruFocus ranks the company's profitability 7 out of 10 on several positive investing signs, which include a high Piotroski F-score of 8, a 4.5-star business predictability rank and an operating margin that has increased approximately 3.2% per year on average over the past five years. Despite this, net margins and return on assets outperform just over half of global automobile competitors.
Company financial strength summary
BYD's financial strength ranks 5 out of 10 on the back of interest coverage and debt ratios underperforming over 60% of global competitors. Despite this, the company has a strong Altman Z-score of 3.15 and a Beneish M-score that suggests little or no earnings manipulation.
Shares rise slightly yet remain overvalued
Shares of BYD's H shares (HKSE:01211, Financial) traded around 177.8 Hong Kong dollars ($22.84) while shares of the company's China A shares (SZSE:002594, Financial) traded around 170.99 yuan. The stock is significantly overvalued based on Wednesday's price-to-GF Value ratio of over 2.30.
Berkshire disclosed in its 2020 shareholder letter that it owns 225 million shares of BYD, or approximately 8.2% of total shares outstanding.
Disclosure: The author has no positions in the stocks mentioned. Berkshire's holding in BYD comes from its press releases. SEC 13-F filings generally display U.S.-based holdings only.
The mention of stocks in this article does not constitute a recommendation. Investors must do their own diligent research before investing in the stock market.
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