* Buffett could be tempted to sell down BYD stake -
* Buffett likely to express concern over BYD missteps
* Stake now worth $1.6 bln versus purchase price of $230
(Repeats item first published Friday with no change to text)
HONG KONG, Sept 24 U.S. billionaire Warren
Buffett could deliver some tough talk to BYD Co Ltd (1211.HK)
when he visits the Chinese automaker next week, including
potential plans to sell down his stake in the former high flyer
that has hit a speed bump.
BYD was China's fastest-growing car maker last year but has
encountered a host of problems in 2010, including sliding
sales, a delay in plans to export its electric cars, and a
legal dispute with the government over land it wants to
Buffett's Berkshire Hathaway Inc (BRKa.N) bought 10 percent
of the company in 2008 -- an investment that has yielded
handsome rewards with the stake now worth $1.6 billion, nearly
seven times the original $230 million purchase price.
Still, the current value is well off a peak of $2.5 billion
reached last October, leading some to speculate that Buffett
may be tempted to cash out part or all of his investment for a
return that is still impressive by any measure.
"Buffett's visit to BYD may not be good news for the
company," said Andrew To, sales director at Tai Fook
Securities. "The old man may actually be tempted to sell down
as the value has been inflated by several times."
Buffett and Bill Gates, the 55-year-old co-founder and
chairman of Microsoft Corp (MSFT.O), will arrive in China next
Monday for a four-day visit, including three stops related to
BYD in the cities of Beijing, Changsha and Shenzhen.
Buffett and Gates, America's two richest men and the
world's top two donors to charity, will also host a private
meeting in Beijing to discuss philanthropy development in
But Buffett, who made his billions as a shrewd investor,
could be more focused on BYD, whose shares soared after
Berkshire Hathaway's initial investment on hopes the
battery-maker-turned- auto-manufacturer could become a future
electric vehicle leader.
Buffett admitted previously that his bet on BYD was less
focused on the company's products and more on its founder and
chairman, the entrepreneurial Wang Chuanfu, known for devoting
his time to the company and passionately pursuing new products.
BYD's shares now trade at more than 20 times projected
earnings, nearly double the multiple of rivals Dongfeng Motor
Group Co Ltd (0489.HK) and domestic leader SAIC Motor Corp Ltd
Some analysts are questioning the company's ability to
deliver its new energy vision, and others say it may be
straying too far from its roots as a battery specialist.
Chinese media recently reported that BYD had acquired 18
percent of Zhabuye Lithium, which has mining rights in the
country's biggest lithium mine, for about $30 million. Other
reports said the company planned to make electrical appliances
such as air conditioners and TVs.
"The company should do whatever it is good at," said Johnny
Wong, an analyst at Yuanta Research. "The share price will fall
further if they really enter the home appliance sector, in
which competition is keen."
(Reporting by Doug Young; Editing by Chris Lewis)