BYD Co., a leading Chinese electric vehicle manufacturer, has raised HK$43.5 billion ($5.6 billion) in what has become Hong Kong’s largest share sale in nearly four years. The company sold 129.8 million shares at HK$335.20 each, confirming earlier reports from Bloomberg. This price is a 7.8% discount from Monday’s closing price and sits at the lower end of the range initially marketed for the offering.
The Shenzhen-based automaker’s share sale was upsized by 10%, increasing from an initial offer of 118 million shares. Despite the sizable transaction, BYD’s stock dipped 7.5% in early trading on Tuesday.
This share offering marks Hong Kong’s largest since 2021, when food delivery giant Meituan raised $10 billion through a combination of top-up placements and convertible bonds. BYD’s successful deal adds to the growing optimism among dealmakers who believe Chinese share sales are poised for a rebound after a prolonged period of decline.
The funds raised by the offering will primarily be used for expanding BYD’s international operations, investing in research and development, and supporting its working capital and general corporate expenses.
Citigroup analyst Jeff Chung expressed positive sentiments about the offering, noting that BYD’s decision to raise capital in Hong Kong, instead of converting Chinese yuan into foreign currencies, was a strategic move to avoid expensive conversion fees.
BYD, China’s top-selling automotive brand, has seen significant growth, with a 161% year-on-year increase in sales of electric and hybrid vehicles. The company also recorded a strong overseas sales performance, hitting a new record of 67,025 units sold abroad last month.
The company’s shares have surged 46% in Hong Kong since January, in contrast to a 29% decline in Tesla’s stock during the same period. This growth is part of BYD’s broader strategy to expand its global presence. The automaker is focused on setting up production plants in multiple regions to circumvent tariffs imposed on Chinese-made electric vehicles.
In particular, BYD is looking to build a third European factory within the next 18 months and ramping up production at its home base in Shenzhen. Additionally, it is constructing a large research and development center aimed at enhancing its technological advancements, including making advanced driver assistance systems standard in many of its vehicles, including more affordable models.
As part of its global expansion, BYD is targeting a sales goal of 6 million vehicles in 2025, putting it on track to compete with industry giants like General Motors. Its market expansion spans Southeast Asia, Australia, Japan, and Latin America, with new factories and dealership networks being established.
The offering was highly oversubscribed, with participation from long-only investors, sovereign wealth funds, and strategic investors such as the Al-Futtaim Family Office from the UAE. Both firms plan to strengthen their partnership, focusing on new energy vehicles, according to BYD.
Goldman Sachs, UBS, and Citic Securities acted as the main coordinators for the deal, helping BYD capitalize on the recent market rally in Chinese stocks.
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