- 2024-07-31
- News
BYD Sells Off as "Stock God" Cuts Stake, Seres Stocks Plummet
On June 25th, two noteworthy events occurred in the domestic new energy vehicle industry within the capital market that attracted attention.
Firstly, Seres experienced a significant drop in its stock price, closing at the daily limit down after a more than 4% decline in the previous trading session. Secondly, BYD was once again reduced in holdings by "Oracle of Omaha" Warren Buffett.
Let's discuss each event in detail, starting with Seres. It is well-known that Seres is highly associated with Huawei. The company's market value has surpassed 100 billion yuan largely due to the strong sales of its Wenjie model, which is also the brand that has received the most empowerment from Huawei to date. The market once referred to Wenjie as "Huawei Wenjie."
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The sudden limit down of Seres' stock is quite unexpected. Logically, the company's upcoming second-quarter report should be very impressive. A limit down at this juncture certainly doesn't indicate poor operating performance, so what could be the reason? The market has circulated two possible explanations.
The first is an internal reason, suggesting that Huawei and Seres are about to "break up," with the news leaking in advance, leading to a rapid capital exit and causing the stock price to limit down.
The second is an external reason, due to a fund company's investment in a photovoltaic enterprise whose stock price has been falling consecutively, necessitating the liquidation of other stocks. Seres happens to be a heavy-weight stock in that fund, resulting in a significant drop in its stock price.
Neither speculation has been further confirmed. Personally, I would rather believe the second speculation, as I genuinely cannot think of a reason for Huawei and Seres to part ways. Wenjie is thriving and has tremendous potential for growth; there is no motive for the two companies to have a falling out at this time.
Compared to Seres, the reduction of BYD's holdings by Buffett is less surprising. The "Oracle of Omaha" has already started reducing his holdings, only accelerating the pace recently.
Documents from the Hong Kong Stock Exchange on June 25th show that Berkshire Hathaway, the company actually controlled by Buffett, reduced its holdings by 2.0175 million BYD H shares on June 19th, thereby reducing its holding ratio from 6.18% to 5.99%.
It is worth noting that on June 11th, Buffett had just reduced his holdings by 1.3475 million BYD shares. In other words, within less than 10 days, Buffett reduced his holdings in BYD twice. Before the first reduction in 2022, Berkshire Hathaway held more than 20% of BYD's shares, which were purchased in 2008 and held for 14 years.BYD and Huawei-empowered Seres无疑是国内新能源汽车行业的两大翘楚，与特斯拉一起成为如今竞争惨烈的新能源汽车市场中确定能够存活下来的三家企业。On June 25th, they both encountered a "Waterloo" in the capital market. Is this a coincidence, or are Chinese electric vehicle companies not being favored?
Previously, the United States, Turkey, and the European Union all announced punitive tariffs on electric vehicles produced in China. The United States even tripled the tax rate from 25% to 100%. In addition, Canada recently stated that it would follow the United States and Europe in conducting anti-subsidy investigations on Chinese electric vehicles, intending to set up trade barriers against Chinese electric vehicles with the two Western big brothers.
However, neither BYD nor Seres will be affected by trade barriers for the time being, as the main markets for both companies are domestic, especially the latter. Almost all of the Enovate models are sold domestically, without entering the European and American markets. Although BYD's export volume is growing rapidly, it is negligible compared to the domestic market's scale of millions of vehicles per year.
Even in the worst-case scenario, where BYD and Seres no longer export any electric vehicles to the European and American markets and only sell domestically, the prospects for both companies remain very bright. However, the sales of electric vehicles from "new forces" and joint venture brands may face greater compression, and they should be more concerned.
Despite the global trade environment being full of uncertainty, especially the electric vehicle industry facing trade barriers and tariff challenges from multiple countries, the Chinese electric vehicle industry still shows strong development momentum and broad market prospects.
Firstly, looking at the domestic market, China is one of the top three automotive markets globally and also one of the fastest-growing electric vehicle markets.
With consumers' awareness of environmental protection and energy saving deepening, and the government's policy support for new energy vehicles increasing, the penetration rate of electric vehicles in the domestic market continues to rise, and the market size continues to expand. This provides huge development space and market opportunities for domestic companies such as BYD and Seres.
Secondly, in terms of technological innovation and product competitiveness, Chinese electric vehicle companies have made significant breakthroughs in key areas such as battery technology, motor technology, and electric control technology, forming a relatively complete technical system and industrial chain.
At the same time, companies continue to introduce new products and technologies, improving product performance and quality to meet consumers' increasingly diverse needs. As industry leaders, BYD and Seres are at the forefront in terms of technological innovation and product competitiveness.
Finally, from a global perspective, although facing trade barriers and tariff challenges, Chinese electric vehicle companies are actively seeking international cooperation and expanding overseas markets.By collaborating and communicating with globally renowned enterprises, we continuously enhance our brand influence and market competitiveness. At the same time, Chinese car manufacturers can learn from Japanese automakers, who were similarly marginalized by European and American markets years ago, by investing in factories in the sales regions and engaging in localized production to circumvent trade barriers.
In summary, the Chinese electric vehicle industry is not in decline; on the contrary, it has ushered in new development opportunities amidst the transformation of the global automotive industry. Leading enterprises, represented by BYD and Seres, will continue to play a leading role in promoting the sustained development and progress of China's electric vehicle industry.
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