Kevin Hua Co-founder of AtlasTrend explores BYD as an investment and the impacts of the topical Trade Wars. (5:08 min duration)
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Telsa is known to be expensive, volatile and burns a lot of cash, but there is another Electric Vehicle manufacturer. Listen to the interview below to find out more (listening time is 5:08 minutes).
Key points:
When investors speak about strong growth & green companies, Tesla is the star example. But it does comes at a premium price. What is AtlasTrend’s perspective?
- Our view is Telsa has played its part & made electric vehicles (EV) very aspirational & help more people talking about EV & where the directions is going.
- From an investment perspective Tesla is too expensive at the current prices. It has significant operational challenges ahead of it, it’s burning through billions of dollars in cash each year.
- People remain sceptical whether company can ramp up and build a long term sustainable company.
- Tesla has the same market valuation as General Motors (GM) but Tesla only produces 100,000 cars last year compared to GM which produce significantly more than that.
- For now, Tesla remains a difficult long-term investment.
What’s China’s alternatives and how does it compare to Tesla?
- China is at the forefront of EV with lots of companies are doing it with one in particular we like called BYD
- Listed on Hong Kong Stock Exchange
- Has been around for a long time
- Founded over 20 years ago as a rechargeable battery business
- Has been producing cars (EV) for almost a decade
- Its battery storage capacity is 8 times larger than Tesla’s 1 GW capacity
- Valuation wise, cash positive & makes money from EV
- Has a pathway to grow with Chinese market being so large
Two companies – one in the US and one is in China. If we injected the trade wars scenario, how does it impact investment in BYD?
- The automotive industry is going to be impacted by the ‘trade wars’
- What we like about BYD is most of sales is domestic
- Its has a level of export
- Majority of revenue comes from domestic sales
Is BYD a company you hold in your funds?
- Yes it is. It’s one of our core position in our Clean Disruption Fund
- We analyse the whole breath of EV companies around the world and BYD ticks all the boxes of many of the factors that we like
Listen to more interviews in this series:
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The NBA’s Revenue Sharing Model
Alibaba: Deliver Anywhere in the World in 72 Hours – From When?
Why Investing in the Electric Vehicle Trend is not as Straight Forward as We All Think
Blockchain – The Opportunity Behind Bitcoin’s +1,500% Returns
The Rapid Marriage of Off-line and On-line Shopping from Amazon
Big Data: What, How and Where to Invest
Disney and Netflix are Parting Ways
Investment opportunities from the growth of Online Shopping
Nike Sprints Ahead with Amazon and Instagram
Amazon’s Tuition Costs US$13.7bn for a Food-ucation
AtlasTrend manages global share funds investing in companies driving or benefiting from global themes such as clean disruption, big data and online shopping. Sign up to AtlasTrend today.
