Investors around the world further reduce stakes in Chinese tech firms, some shift investment to Taiwan

Analysts: Chinese stocks could disappear before investors realize the potential gains

Neue Analysis

In the face of a dire outlook for China’s economy and technology sector, foreign investors have been cashing in on their gains by buying Chinese stocks to protect their investments. Some investors have begun to focus their attention on Taiwanese tech companies.

Berkshire Hathaway, Warren Buffett’s investment firm, has reduced its holdings of BYDThe Chinese electric vehicle (EV), conglomerate Xinhua has expanded six times in less that four months, but recently acquired a significant stake. Taiwan Semiconductor Manufacturing Co.TSMC).

According to Hong Kong Stock Exchange data, Berkshire Hathaway sold 1,329,000.500 shares of BYD on Dec. 8 at an average price HK$201.343232 per share (about $26 each share), and cashed out HK$267.7million (about $34.4 million).

Berkshire Hathaway sold 25% of its shares in BYD within four months.

Buffett bought 225,000,000 shares of BYD in 2008 for $232million. He hadn’t sold or reduced his holdings during the previous 14 years. Recently, the company’s stock price has multiplied as much as 33 times, with its market cap reaching as high as $7.7 billion.

Buffett however has sold six BYD shares in succession, on Aug. 24, September 1, Nov. 1, Nov. 8, November 17, and Dec. 8.

Berkshire Hathaway’s current stake in BYD has been reduced from 20.04 percent in August to 14.97 percent.

A concept car for electric vehicles from Chinese vehicle manufacturer BYD, was displayed at Beijing’s auto show on April 26, 2018. (Wang Zhao/AFP via Getty Images).

It is unclear at this time why Buffett resigned from BYD. But, just a week prior to Buffett’s first share reduction in BYD on August 16, President Joe Biden signed into law the Inflation Reduction Act.

The Act