BYD Company Limited is engaged in the research, development, manufacture and distribution of automobiles, secondary rechargeable batteries and photovoltaics, and mobile phone components globally. The automobile and mobile phone segments account for the majority of the company’s revenues with the remaining coming primarily from the rechargeable batteries and photovoltaics segment. China accounts for the majority of the company’s revenues; followed by the United States, Europe, and India.
BYD Co Ltd has committed to a “three green energy dream” that is comprised of solar power, energy storage, and “new energy” vehicles such as hybrid and electric vehicles, of which BYD is the global leader. This strategy provides solutions at each level of the power sector value chain including generation, distribution, storage, and usage. The company has also seen growth in domestic and foreign markets for photovoltaics and new energy vehicles, gaining attention particularly for its public transport product line. BYD has also continued innovating battery technologies by both increasing energy density while lowering cost. For all of these reasons, the company was the only Chinese new energy automobile enterprise to be invited to attend the United Nations Climate Change Conference, COP 21. It also adheres to China’s “Code on Corporate Governance Practices” and has several independent board members. BYD also recently underwent programmatic changes with regard to its pay structure to align employee incentives with long-term capital appreciation and shareholder interest.
As a large manufacturing company, BYD has significant environmental impacts and has yet to begin tracking and reporting on its key performance indicators. The company also faces challenges with layoffs and seems to lack transparency on labor management issues in general. BYD’s chemical management also seems to be lagging in comparison to more progressive electronics manufacturers that are eliminating substances not yet restricted by regulations.
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 12/31/16 and may not reflect current opinions or subsequent events.