BYD's stock price surged ahead of the competition.
Yesterday, a strong positive candlestick swept away the gloom that had hung over the A-share market since last week. The Shanghai Composite Index not only recovered the 2,500-point mark but also broke through the five-day and ten-day moving averages. The lively scene of widespread gains and limit-up stocks reappeared, with 28 non-ST stocks hitting the daily limit in Shanghai and Shenzhen.
Yesterday's most dazzling sector was undoubtedly the lithium-ion battery sector. Stimulated by favorable policies for new energy vehicles, individual stocks in the lithium-ion battery sector surged to their daily limit, with a total of 8 stocks hitting the daily limit by the close.
Institutional funds are particularly bullish on BYD.
Recently, the Ministry of Science and Technology, the National Development and Reform Commission, the Ministry of Finance, and the Ministry of Industry and Information Technology officially issued the "Notice on Further Improving the Demonstration and Promotion Pilot Work of Energy-Saving and New Energy Vehicles," requiring pilot cities to actively study measures to exempt new energy vehicles from license plate restrictions, lottery systems, and traffic restrictions, and to introduce support policies such as parking fees and road toll fees.
Positive news for new energy vehicles will likely benefit the lithium-ion battery sector the most. Shortly after the market opened yesterday, Power Source, EVE Energy, and BYD quickly surged to their daily limit. Subsequently, Jiangsu Guotai, Chengdu Aircraft Industry, Desay Battery, Sunwoda, and Luxiang Shares also hit their daily limit.
The trading data shows that institutional investors also participated in yesterday's surge in the lithium-ion battery sector, with BYD, a company that combines lithium-ion battery and new energy vehicle concepts, showing the strongest interest. Data shows that during BYD's limit-up move on November 1st, two institutions bought nearly 58 million yuan worth of shares, ranking first and second on the buy list; although one institution sold 7.54 million yuan worth, the net purchase amount still reached over 50 million yuan. Yesterday, another institution bought 18.47 million yuan worth of BYD shares.
Although two institutions bought shares of Sunwoda yesterday, two institutions also sold shares, with the buying and selling amounts being roughly equal. For Desay Battery, one institution bought shares while two institutions sold, with the selling amount nearly double the buying amount. Meanwhile, the top five buyers of Jiangsu Guotai were all speculative investors; institutional investors dominated the top four sellers, with a total selling amount of 59 million yuan.
Hyping up lithium-ion batteries is just rehashing old news.
BYD's recently released third-quarter report showed disappointing performance, with net profit falling by 85.49% year-on-year. It is projected that full-year net profit will decline by 35% to 65% year-on-year (last year's net profit was 2.523 billion yuan). Why would such a stock with such a sharp decline in performance attract institutional investors?
Data shows that BYD's IPO on the SME board did not receive enthusiastic support from institutional investors. Only 11 institutions were allocated shares offline, resulting in an offline subscription rate of 20.55%. Despite this, as a genuine Buffett concept stock, it was heavily speculated on by speculative funds upon listing, with the share price hitting two consecutive daily price limits. However, BYD's plummeting performance caused its share price to quickly fall. And with the unlocking of shares allocated to institutional investors offline on September 30th, the share price even briefly fell below the issue price.
Huang Zhenyu, an investment advisor at Founder Securities Wealth Management Center (Hangzhou), believes that the market generally doesn't prioritize performance when speculating on thematic stocks, but rather focuses on price movements. In fact, BYD had already bottomed out on October 24th, with its moving average system gradually improving; coupled with its unique Buffett concept and status as a leading new energy vehicle company, it's not surprising that it attracted institutional investment. The possibility of institutional funds participating in the speculation after winning offline subscriptions cannot be ruled out.
Judging from the performance of lithium-ion battery concept stocks yesterday, after a period of consolidation at the bottom and a surge in trading volume, Huang Zhenyu believes that this sector still has room for short-term gains. However, the market has been speculating on lithium-ion battery concepts for a long time, with companies such as Chengdu Aircraft Industry Group, Desay Battery, and Jiangsu Guotai all being overhyped. Therefore, in terms of both upside potential and the duration of the rally, this sector cannot compare to the newly discovered cultural and media sector.
