BYD, the world’s largest electric vehicle (EV) maker, plans to buy back RMB 400 million ($55.56 million) worth of its mainland-listed shares, with the aim of lifting the company’s stock price amid concerns about escalating competition in China, reports the South China Morning Post. Shenzhen-based BYD, backed by Warren Buffett’s Berkshire Hathaway, will tap its own cash reserves to repurchase at least 1.48 million yuan-denominated A shares, or about 0.05% of its total, before cancelling them, according to the company’s announcement after the market close on Wednesday.
A buy-back and cancellation leads to a smaller volume of total shares in the market, which translates to a rise in earnings per share.
The proposed share repurchase seeks to “safeguard the interests of all shareholders, shore up investor confidence, and stabilise and enhance’ the company’s value,” BYD said in a filing to the Hong Kong and Shenzhen stock exchanges.