Buffett’s Berkshire has now offloaded more than 25% of BYD stake

Berkshire Hathaway Inc. further trimmed its stake in Chinese electric vehicle maker BYD Co., according to a filing Tuesday, offloading 1.3 million Hong Kong-listed shares to take its holding below 15%. That means the investment house has now sold more than one-quarter of its position in five months.

Warren Buffett’s firm started publicly reducing its stake in Shenzhen-based BYD in August, when it cut its holding from 20.49% to 19.92%. The pace of sales accelerated in November. Berkshire only has to disclose sales of 1% or more, with any transactions to counterparties under that figure not publicized. Berkshire’s holding now stands at 14.95%.

BYD’s stock has fallen around 31% since a Berkshire-sized stake was shown to have entered the Hong Kong exchange clearing system on Jul. 11, according to Webb-Site.com, eroding HK$248 billion ($31.9 billion) from its market value.

Top BYD executive Stella Li said in a recent Bloomberg News interview that Buffett still believed in the company but defended his reasoning to extract some returns on his long-held position in the Chinese automotive giant.

Berkshire, which remains BYD’s largest shareholder in Hong Kong, invested in the automaker in September 2008, buying 225 million shares for about $230 million. The value of that stake ballooned more than 2,700% to HK$331 per share through June this year, when BYD hit a record high.

The remaining 164 million shares held by Berkshire are worth around $4.4 billion as of Tuesday. The company has recouped about HK$3.4 billion from the six substantial stake sales of 1% or more, although those sales represent less than one-third of what has been declared.

BYD at one point was the third-most valuable automaker globally, behind only Tesla Inc. and Toyota Motor Corp. 

Despite the recent stock weakness, BYD has continued to notch up record monthly sales figures, selling almost 230,000 new-energy vehicles in November. And in the third quarter of this year, it sold 534,164 units — near-evenly split between pure electric cars and hybrids — compared to Tesla, which shifted some 343,830 pure battery-powered cars.

Andy Wong, a fund manager at LW Asset Management Advisors Ltd., said he expected BYD to continue with its original plans, referring to the automaker’s efforts to dominate the market, expand and maintain its leading position with a pipeline of new models.

Wong said he was “a bit surprised that they don’t care about the price movement in last few months,” referring to BYD’s somewhat sanguine reaction to the legendary investor’s disposal so far. – BLOOMBERG