BYD’s Shenzhen Share Split Could Boost Stock After Retreat

(Bloomberg) -- A three-for-one stock split for BYD Co.’s mainland-traded shares could be a positive catalyst for the carmaker after a weeks-long slump.

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Its Shenzhen-listed stock trades ex-dividend on Tuesday, taking into account a bonus issue and capitalization issue announced in April. This will lower the price for one lot of 100 shares to around 11,000 yuan ($1,532), down from roughly 34,000 yuan per lot on Monday, a potential boon onshore where retail investors are more active. They’re also highly sensitive to the minimum amount required to own shares of the company.

“The stock split is likely to bring in new retail interest as each share drops to a third of the price before trading ex-dividend,” according to He Wenping, managing director at Beijing Youhe Private Equity Management. “However, these levels may still be too expensive for the bulk of mom-and-pop traders.”

While BYD’s Hong Kong-listed stock rose in the lead up to its ex-dividend date last month, there was no apparent boost afterward. This may have been because a lot size of 500 shares on the exchange meant at least HK$70,000 was needed to buy the stock after the split, which may have deterred smaller investors.

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