Chinese electric vehicle manufacturer BYD conducted a primary share sale on Tuesday that exceeded its target level by obtaining USD 5.59 billion. With 129.8 million primary shares sold above the 118 million initial target BYD reached two important milestones: it became the largest equity follow-on offering in Hong Kong since four years and the largest follow-on deal in automotive history globally during the previous decade.

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BYD stock opening shares on Tuesday showed an 8 percent drop while the Hang Seng Index lost 1.5 percent because of the share price discount. The shares of BYD went for sale at HKD 335.20 each which marked a 7.8 percent reduction from the HKD 363.6 closing price on Monday. Hong Kong investors received shares of the company through an accelerated book build process across a marketing price band from HKD 333 to HKD 345.

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Al-Futtaim Family Office from the United Arab Emirates became a prominent investor in the deal while in parallel discussions exist with BYD to establish numerous strategic partnership plans without providing specific funding details. This transaction demonstrates rising foreign investor demand for China’s automotive and technology divisions despite most Chinese automakers actively pursuing Middle Eastern markets which remain smaller than China’s domestic customer base.

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Since 2022 BYD gained the position of China’s leading automotive manufacturer by launching competitive electric car models at budget-friendly prices. The 4 million vehicles sold under BYD during 2024 yielded more than 90 percent of their overall revenue which accounted for nearly two-thirds of the entire China electric and hybrid market sector.

The share sale proceeds will be used by the company to fund research and development activities together with international market expansion and supplement working capital while reserving funds for general corporate purposes. As BYD accelerates its global expansion by adding new production facilities and hiring more workers, it aims to sell between 5 million and 6 million cars in 2025, competing with global giants such as General Motors and Stellantis.

A Citigroup analysis noted that raising funds offshore in Hong Kong will help BYD expedite its international business plans, although the company faces challenges due to the rigidity of moving cash out of China. The deal was led by Goldman Sachs, UBS, and CITIC Securities.