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In recent days, Warren Buffett’s Berkshire Hathaway fully exited its longstanding investment in Chinese electric vehicle maker BYD, ending a position originally taken in 2008 and held for 17 years. This move comes as BYD faces growing international expansion, heightened competition, and shifting market confidence in Chinese automakers.
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Berkshire Hathaway’s departure highlights the scrutiny and changing sentiment that global investors may be placing on Chinese EV companies navigating challenging market conditions.
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We’ll explore how Berkshire Hathaway’s full divestment after a long-term stake may influence investor perceptions surrounding BYD’s growth story.
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To own shares in BYD, you really need conviction in its global expansion and ability to adapt amid rapid shifts in the electric vehicle market. Even after Berkshire Hathaway’s headline-making exit, the core thesis for BYD remains tied to scaling outside China, growing its brand across Europe, and maintaining innovation in hybrid and electric models. While long-term production momentum and diversification into energy storage still look like major catalysts, Berkshire’s departure might sharpen focus on near-term pressures, especially the cooling sentiment toward Chinese automakers and fresh competition in Europe. The initial 3% share price drop following the news suggests that, for now, the impact is more about investor confidence than disruption to fundamentals or upcoming launches. The stock’s valuation remains well below analyst targets, so unless there is a larger exodus, the most fundamental risks and catalysts seem unchanged, but how market sentiment evolves from here could matter more in the short term than before.
Yet, with fresh competitive threats rising in Europe, execution risk is something investors shouldn’t ignore. Despite retreating, BYD’s shares might still be trading 27% above their fair value. Discover the potential downside here.
Among 26 Simply Wall St Community fair value estimates for BYD, projections range from CNY134.98 to a very large CNY478.66, reflecting big differences in growth optimism. While these views highlight the wide gap in investor expectations, recent events have reinforced why short-term sentiment shifts can influence performance just as much as fundamentals. Consider how these community perspectives might apply to your view on current catalysts and risks.
Explore 26 other fair value estimates on BYD – why the stock might be worth just HK$134.98!
Disagree with this assessment? Create your own narrative in under 3 minutes – extraordinary investment returns rarely come from following the herd.
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A great starting point for your BYD research is our analysis highlighting 4 key rewards that could impact your investment decision.
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Our free BYD research report provides a comprehensive fundamental analysis summarized in a single visual – the Snowflake – making it easy to evaluate BYD’s overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include 1211.HK.
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