The proposal is based on Wang Chuanfu's confidence in China's NEV industry and the company's prospects, as well as his recognition of BYD's value to boost investor confidence, BYD said.
Several China-listed companies have proposed or are in the process of share buybacks amid weak market performance, with BYD (OTCMKTS: BYDDF) the latest.
BYD received a proposal from its chairman and president Wang Chuanfu on December 6 for the company to buy back shares traded on China's A-share market, according to a stock exchange announcement from the Shenzhen-listed company today.
Wang proposed that BYD buy back a total of 200 million yuan ($28 million) in A-shares, with the repurchased shares to be used for employee share ownership plans, share incentive programs or to reduce registered capital, according to the announcement.
The proposal is based on Wang's confidence in China's new energy vehicle (NEV) industry and the company's prospects, as well as his recognition of BYD's value to enhance investor confidence, the announcement said.
The proposal includes BYD buying back A shares through centralized bidding at a price ceiling not higher than 150 percent of the company's average share trading price for the 30 trading days before the date on which BYD's board of directors passed the proposal.
The buyback period is within 12 months from the date of the shareholders' meeting to consider and approve the program, according to the announcement.
China's A-share market has been weak so far this year, with the Shanghai Composite Index down about 5 percent as of the December 5 close, and BYD down 24 percent over the same period.
BYD's stock price rose in Shenzhen trading today, up about 2 percent to RMB 200.24 yuan at press time.
BYD has seen strong NEV sales this year, leading to strong financial performance.
In the third quarter, BYD's revenue was a record RMB 162.15 billion, up 38.49 percent year-on-year and up 39.76 percent from the second quarter, according to its earnings report released in late October.
The company reported a record net profit attributable to shareholders of RMB 10.41 billion in the third quarter, up 82.16 percent year-on-year and 52.59 percent from the second quarter.
BYD's gross profit margin in the third quarter was 22.12 percent, the highest since the third quarter of 2020. The company's gross margin was 18.72 percent in the second quarter, compared with 18.96 percent in the same period last year.
In the first three quarters, BYD sold 2,079,638 NEVs, up 76.23 percent year-on-year.
BYD sold 301,903 NEVs in November, up 31.02 percent year-on-year and essentially flat from October's 301,833 units, according to data it announced on December 1. In the January-November period, BYD sold 2,683,374 NEVs, up 64.8 percent year-on-year.
In addition to BYD, CATL, China's largest power battery maker, began its share buyback late last month, and another battery maker, Gotion High-tech, announced a detailed share buyback program earlier this month.
($1 = RMB 7.1580)
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