HONG KONG/BEIJING, Sept 29 (Reuters) - Chinese car and battery maker BYD Co Ltd has discussed the possibility of billionaire investor Warren Buffett raising his 10 percent stake, local media reported on Wednesday, boosting its shares. In the past week, analysts had speculated that Buffett, who is making a closely watched tour of China with former Microsoft chairman Bill Gates, might sell down his stake after the automaker hit several bumps in the road, including sliding sales, delayed plans to export its electric cars, and a legal dispute with China over land it wants to develop. Gates and Buffett, the world's second- and third-richest men respectively, have visited several Chinese cities this week, meeting Chinese businessmen and researchers, and will attend a dinner on Wednesday during which they will speak to some of China's growing crop of rich entrepreneurs about charity. China Business News cited BYD sources as saying Buffett met on Tuesday night with BYD officials in a closed door meeting, at which the possibility of increasing the 10 percent stake in BYD held by Buffett's Berkshire Hathaway was the major topic. But it was unknown whether they had reached any conclusion, the report added. Asked about the possibility on the sidelines of an event in Beijing on Wednesday, Buffett declined to comment on what he may do. But in a live interview by Chinese state television CCTV on Wednesday, Buffet said he would 'probably hold BYD stakes 10 years from now. 'This is a good thing for BYD,' said Zhang Jing, an analyst at Phillip Securities (HK) Ltd. 'If (Buffett) raises his stake at the current high price levels, that would be a vote of confidence, for sure.' BYD shares closed up 2.9 percent in Hong Kong, outpacing the broader Hang Seng Index's 1.22 percent rise. STRONG PERFORMER? Buffett, 80, is visiting China almost two years after Berkshire's affiliate MidAmerican Energy bought 10 percent of BYD. That investment has yielded enviable returns, with the stake now worth $1.45 billion, over six times the original $230 million purchase price. Still, that value is far below the peak of $2.5 billion reached last October. Separately, Buffett and Gates were in Beijing on Wednesday to attend a BYD ceremony for the launch of the company's first premium multipurpose vehicle (MPV). The car, the M6, will allow the carmaker to tap the fast-growing premier MPV market, now dominated by General Motors and Honda Motor. BYD's portfolio now includes sedans only. BYD shares have risen about 19 percent in the past two weeks on Buffett's visit. The stock performance lags the company's main rivals, however. Earlier on Wednesday, carmaker Brilliance China hit a record of HK$5.52 on expectations of higher car sales in the coming months, Geely rose nearly 4 percent and Dongfeng Motor Group surged nearly 7 percent. 'The stock looks expensive but Coca-Cola also grew up from a small company,' said Zhang. Shares of BYD, which stands for 'Build Your Dreams', are trading at around 25 times 2010 projected earnings. http://www.finanznachrichten.de/...ssed-byd-stake-hike-report-020.htm
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