On March 11, 2025, BYD Co., Ltd.(hereinafter referred to as "BYD") officially announced the completion of an H share placing plan with a scale of HK$43.383 billion.According to the announcement, the company issued 129.8 million new H shares to no less than six independent placees at a price of HK$335.2 per share, accounting for 10.57% of the total share capital of H shares after the placement. The total share capital increased from approximately 2.909 billion shares to 3.039 billion shares, the number of H shares increased from 1.098 billion shares to 1.2278 billion shares, and the number of A shares remained unchanged.This placement is not only one of BYD's largest equity financings in recent years, but also marks the acceleration of its globalization strategy and R & D investment.

Judging from the scale of fundraising, BYD's pricing of this placement represented a discount of approximately 7.8% to the closing price of Hong Kong stocks of HK$363.6 on March 3. The market's response to this showed short-term fluctuations. The stock price fell more than 7% on the day the news was announced.However, behind the discount placement is the company's precise control of capital needs.According to the prospectus, the net raised amount of HK$43.383 billion after deducting commissions and fees will be mainly used for R & D investment, overseas business expansion, supplementary working capital and general corporate purposes.This fund allocation logic is highly consistent with BYD's layout in new energy vehicle core technologies (such as blade batteries and smart driving) and overseas markets (such as Europe and Southeast Asia) in recent years.It is worth noting that this placement adopts a "general authorization" mechanism, which avoids the approval process of the shareholders 'meeting, demonstrating the management's keen grasp of the market window.InvalidParameterValue

Changes in equity structure are also worthy of attention.After the placement, the proportion of H shares in total share capital increased from 37.76% to 40.4%, while the proportion of A shares was diluted from 62.24% to 59.6%.Despite the equity dilution effect, BYD is expected to enhance its international recognition in the capital market by introducing institutional investors to optimize the shareholder structure.Judging from the nature of the placees, the participation of no less than six independent professional and institutional investors may include long-term sovereign funds or the world's top investment institutions, which provides potential resource synergy opportunities for subsequent overseas business expansion.InvalidParameterValue

The deep motivation for this financing needs to be interpreted in the context of industry competition.In 2025, the global new energy vehicle market will enter a critical period of technology iteration and production capacity expansion. Tesla, Volkswagen and other giants will continue to increase investment in electrification, and the pace of China car companies going abroad has also accelerated significantly.BYD's 2024 financial report shows that its R & D expense ratio remains at 6.8%, higher than the industry average, but it is still far from Tesla's 12%.If R & D investment in this fundraising accounts for 30%-40%, it is expected to focus on solid-state batteries, 800V high-voltage platforms and high-end autonomous driving fields to consolidate the technical moat.In terms of overseas business, the company's factory construction in Thailand and Brazil has entered the countdown to production, and channel laying in the European market also requires continuous blood transfusion. Fundraising can provide stable cash flow for these projects.InvalidParameterValue

Markets are divided on the long-term impact of the placement.The optimistic view is that BYD's replacement of debt expansion with equity financing will help optimize its asset-liability ratio (68% at the end of 2024) and reduce financial risks; at the same time, sufficient capital reserves can support it in coping with possible price wars and supply chain fluctuations.The cautious faction pointed out that the expansion of H-share circulation may aggravate stock price volatility, and there is uncertainty in the return cycle of high R & D investment.However, judging from historical performance, BYD's conversion rate of R & D results has increased significantly after its fixed increase in 2023. The launch of the DM-i hybrid system and e-platform 3.0 is an example, which provides endorsement for the efficiency of this capital use.InvalidParameterValue

It is worth extending discussion that the timing of this placement highlights the strategic nature of BYD's capital operations.At the beginning of 2025, the Hong Kong stock market was affected by rising expectations of the Federal Reserve to cut interest rates, and the liquidity environment improved. The Hang Seng Index rebounded by more than 15% from its 2024 low. Issuing H shares at this time can reduce the dilutive impact on earnings per share.In addition, choosing Hong Kong dollars instead of US dollars for financing can not only avoid exchange rate risks, but also match the currency settlement system of its main production bases and sales markets.From an industry comparison perspective, Ideal Automobile and Xiaopeng Automobile will raise approximately US$2 billion and US$1.5 billion respectively through additional U.S. stocks in 2024. In comparison, BYD's fundraising scale has more strategic depth.InvalidParameterValue

Looking to the future, BYD may need to seek a higher balance between capital operation and operating efficiency.Although this placement alleviates short-term capital pressure, how to transform technological advantages into continuous improvement in profitability remains a core challenge.As the global carbon neutrality process accelerates, its layout in emerging areas such as battery recycling and energy storage systems may benefit from this capital injection, thus opening the second growth curve.For investors, the focus should focus on the implementation progress of fundraising projects and signs of improvement in ROE, which will be a key yardstick to measure the success of this placement.