Both the majority of car fans and most investors are likely to think of Tesla when they hear the keyword "electromobility". With his innovative range of models and the rapidly rising share price, the US industry pioneer is inspiring both groups of people. In comparison, BYD is rather a shadowy existence. But the company from China has nothing to hide. In 2003, the year Tesla was founded, the company from Shenzen dedicated itself to e-mobility. True to the eponymous motto "Build your dreams", BYD has since become one of the leading brands for electric and hybrid vehicles in China. Although management's focus is on the domestic market, the all-electric crossover SUV "Yuan" was one of the world's best-selling e-cars in 2019 according to Statista (see chart).
BYD is an international leader with its electric-powered buses. They have recently been used in the public transport system of the Spanish capital Madrid, for example. With the development of the SkyRail suspension railway or innovative storage systems for photovoltaic electricity, BYD underlines its strategy focused on sustainability. The company thus has a proverbial electrifying effect on investors. In the year of the company's 25th anniversary, the BYD share boomed to unprecedented heights. At the end of November, it was trading more than 400% above the 2019 year-end closing price. None other than Warren Buffett is among the shareholders who can be pleased with this impressive performance. Through his holding company Berkshire Hathaway, the star investor has been involved in the Chinese Large Cap since 2008. Buffett is likely to have fallen on BYD's latest quarterly figures: At CNY 44.5 billion, turnover exceeded the previous year's figure by a good 40%. The bottom line is that the company earned a good CNY 1.7 billion from July to September, more than in the entire first half of the year. While BYD also benefited from its rapid entry into the production of face masks, it was mainly its core business that boosted earnings.
After the lockdown, customers returned in droves to the car dealerships, and the carmaker was able to score points with them above all with the new "Han" model and a modified version of the "Tang". According to BYD, this duo has a large number of orders. Management therefore considers both models to be drivers of the expected volume growth in the e-mobility segment in the current final quarter as well. The Chinese drive for innovation continues unabated: In mid-November, BYD introduced the "D1", which was developed in cooperation with the transport service DiDi. In addition to a sliding door on the right-hand side, a particularly comfortable driver's seat and relatively large legroom for the passengers make this van a ridehailing vehicle. The Chinese Uber competitor DiDi has more than 550 million users and employs 31 million drivers. Initially, the "D1" will be used in the Chinese city of Changsha, before BYD delivers the model to other regions.
As a multifaceted industry giant with a focus on the world's largest market for e-cars, BYD cannot be missing from the new Swissquote Global eMobility Index. Together with Tesla, the Chinese are among the 24 companies included in the benchmark. Softcallable barrier reverse convertibles on BYD offer a possible alternative or supplement to this diversified thematic investment. Leonteq has launched two variants of this yield optimisation structure. With an identical maturity of 15 months and a barrier at 55% of the initial fixing, the product is available in CHF and USD. In the domestic currency, the guaranteed coupon is 13.50% p.a. With an allocation in USD, the payout is 150 basis points higher. Please note that the issuer has a right of termination in both cases.
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