(Bloomberg) — Chinese electric vehicle maker BYD Co. raised HK$43.5 billion ($5.6 billion) in Hong Kong’s biggest share sale in nearly four years.
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The company sold 129.8 million shares at HK$335.20 each, according to terms of the deal, confirming an earlier Bloomberg News report. The price represents a 7.8% discount to Monday’s close in Hong Kong and sits at the lower end of the deal’s marketed price range.
Shenzhen-based BYD’s offering was enlarged by 10% from the 118 million shares it had originally offered, Bloomberg calculations show. The stock fell 7.5% in early trading Tuesday.
The transaction marks Hong Kong’s biggest share sale since food-delivery firm Meituan raised $10 billion in 2021 through a combination of a top-up placement and convertible bonds. BYD’s deal also reinforces expectations among dealmakers that Chinese share sales are primed for a rebound after years of decline.
The offering follows a strong performance by the automaker, which sold more than 318,000 pure electric and hybrid passenger vehicles last month — a 161% year-on-year surge. The company also notched another record month for overseas sales, which hit 67,025 units.
The company plans to use the fresh capital to expand its overseas business, invest in research and development, supplement its working capital and spend on general corporate purposes, according to earlier terms of the deal seen by Bloomberg News.
“We view the equity financing as positive,” Citigroup Inc. analyst Jeff Chung said in a note to clients. BYD is raising cash in Hong Kong because transmitting the Chinese yuan into foreign currency is expensive, said Chung, who covers automotive stocks.
BYD, China’s top-selling auto brand, is capitalizing on a rally of its shares, which have surged 46% in Hong Kong since their January low. That’s in contrast with Tesla Inc.’s 29% decline over the same period.
The Chinese company is also looking to localize production in several places around the world in order to bypass tariffs being levied on China-made EVs. With the deal, BYD “could accelerate its overseas factory construction, which has become more urgent amid mounting tariff risk,” Bloomberg Intelligence analyst Joanna Chen said in a note.
BYD is aiming to increase total sales to as much as 6 million vehicles this year putting it on par with the likes of General Motors Co. To reach that target, it is expanding in markets from Southeast Asia to Australia, Japan and Latin America, building factories and rolling out dealership networks.
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