BYD IPO: Selling Into a Skeptical Market 比亚迪IPO 市场疑虑重重

As if car maker BYD’s (HKEx: 1211) problems weren’t bad enough, the sputtering company now must launch its upcoming A-share IPO — which was never guaranteed strong interest to begin with — into a decidedly bearish market that has already seen it scale back the size of the offering. (English article) BYD chairman Wang Chuanfu says his company will use the $200 million it hopes to raise to build a new lithium battery factory in pursuit of its dreams to become an electric car leader. Perhaps that’s where it will really spend the money, but Wang needs to be talking more during this roadshow about how he plans to restore BYD’s flagging sales by revamping its current product line, rather than focusing on a product line that won’t make any major contribution to the company’s business for at least 5 years, and may never make any contribution at all. Shares in BYD, which is 10 percent owned by billionaire investor Warren Buffett, are down by a third in the last three months alone, and have been declining steadily since the middle of last year after inventory issues first started to emerge at this once promising company. I would look for anemic demand during the roadshow for its China IPO, and probably an even weaker debut for the company’s shares, which have been priced at the low end of their range at 18 yuan each. BYD is already fighting a difficult battle by launching its IPO into a decidedly bearish market. But Wang and his company need to change their tone a bit and start focusing on what they will do in the present to turn the company around, rather than on their big hopes for electric vehicles in the future, if they want to prevent this new listing from becoming a total disaster.

Bottom line: BYD needs to start focusing on what it will do to boost weak sales, and stop dwelling on its electric car plans, if it wants to prevent its upcoming IPO from being a total flop.

比亚迪<1211.HK>的问题真是一个接着一个,现在这家汽车制造商必须启动A股IPO,此事从一开始就很难保证市场兴趣,目前市场又处於熊市,公司已经缩减此次募资规模。比亚迪董事长王传福表示,公司会把准备募集的2亿美元用於一座新的锂电池工厂的建设,推动公司实现电动汽车领头羊目标。或许这正是比亚迪真正的资金投入方向,但对公司如何调整当前产品线来重振销售,王传福需要在此次IPO路演中做出进一步解释,毕竟比亚迪的电动车业务在至少五年内不会为公司整体业务做出重大贡献,而且有可能永远也不会做出任何贡献。比亚迪股价单单过去三个月就下挫了三分之一,且自去年中期首现库存问题以来一直稳步下行。我认为比亚迪A股IPO路演很可能需求疲弱,A股首秀或更乏力。比亚迪选择这样一个A股上市时机本已是一场攻坚战,但要防止此次IPO成为一场彻头彻尾的灾难,王传福与其公司还需稍稍调整一下调门,应开始强调当前打算怎样做来扭转公司颓势,而非强调公司未来对电动汽车的宏伟蓝图。

一句话:比亚迪若要防止此次IPO成为一场彻头彻尾的灾难,需把重点放在如何改善当前销售上,而非一味沉迷于电动汽车计划。

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