 Good day, fellow investors. When it comes to Chinese stocks everybody is saying stay away from that, it's a fraud, but what if Warren Buffett owns 8.25% of the company? Charlie Munger owns the company. Then we have to also look at from a different perspective. Further, what if the company is very, very similar to Tesla, but profitable? It's actually the leader in electric vehicle sales in the globe, is investing similarly to Tesla into battery factories, electric buses, Skyrail, not the boring company, has a much better financial situation and as I said, Warren Buffett is invested in it. It's always risky. It is selling mostly cars like Tesla, but then some people say it's a data company. But let's focus now on what is there and let's see whether this is something that fits your portfolio or not. I don't know who will win the electric vehicle race, who will be dominant in 5 to 10 years, but the key is to understand the risk and reward and see how that fits your portfolio. That's what investing is all about. 10 years ago, it was a positive risk reward for Warren Buffett. He took the bet. He did really, really well. And the management says they want to increase sales about 7 times over the next 6, 7 years, become a 1 trillion Remymbi company from the current 120 billion sales. So that's huge upside. If they make that by selling cars, selling batteries, they're entering into deals with Toyota, some other Chinese car companies and they're creating batteries, they have the technology, they're doing buses, garbage trucks. So they're doing a lot of things that Tesla is also doing, but let's say on a much, much less fancy, unglittering way. They're simply doing it, it's a business and they treat it like a business, not like we are doing who knows what. So that's a difference, perhaps also a difference in culture, but Buffett doesn't own Tesla, Buffett owns this. Let me give you an overview of the company and then we'll finish with the risk and reward, the financial analysis and how could this fit your portfolio from an investment perspective. Let's start. Alright, so let me give you an overview of what BYD is. The interest of the Chinese government is to get rid of oil because of environmental issues and because they don't have it, they don't have much of it, so it's much better if they could switch to some new technologies that would be beneficial also for the development of China because of the technology component of it, but also form an environmental perspective. China is a communist country, so what they say has to be done if they say no more fuel engines by 2030, so it will be. We'll see whether it will be profitable for China or not. However BYD gives you exposure to that is the largest EV battery producer in China which gives it an advantage, as said Berkshire and Margar are invested. Also Li Lu with Himalayan capital. So they get sales from automotive and related products, 59%, 34% it from handset components and assembly services, so they service the smartphone industry and then rechargeable batteries just 7%, but a lot of these components are growing fast, still growing fast, revenues are growing fast, so BYD is a fast grower and if it continues to grow at 20-30% over the next 5-10 years which is the goal of the management, this could be a 5-10 vaguer over the next few years. Currently it is in a downturn, smartphone shipments are down, electric vehicles are down and following the stock is also down because the market is always so focused on the short term. If next quarter is bad, let's sell, sell, sell, sell and then again in China stock market investing is not really long-term, a weekend is very very long-term so a lot of gambling, nobody wants to hold something that has the chance of going down which creates opportunities for long-term investors like Buffett invested in 2008. So the developments for example something very interesting, they plan to do an IPO of the battery business by 2022 to separate it from a car supplier and really give perspective on what the company is really focusing on which is batteries and that would separate the low margin business cars, highly competitive to something where they have an advantage for now, they have the supply chains, they have the production capabilities and they can supply those batteries to a lot of car makers and they are making deals with car makers to help them and become actually a battery company, not so much a car company even if they make cars, they also make buses, they also make trucks but it's all in a starting point, I don't know whether they are doing it to learn about the technology, to learn about the supply chain or really because they want to make it profitable. They are profitable now thanks to subsidies in China but those are slowly disappearing so we'll see how this fits the long-term. However the company evolved from doing batteries for your Motorola Razr to creating electrical vehicles cars. So it's a fast-growing company with capable management that really did good things over the long-term. The plan is to continue to grow, they have Skyrail which is another project that really didn't take off but if the government in China decides to build a lot of these one rail, mono rail, Skyrails and they get orders then they might do really, really good. They are doing taxes in Montreal so they are even exporting e-trucks so they are building them in California so also U.S. company so they can also do sales there without the trade wars because they are actually building it from inside. So they are completing their battery recycling plant. They will have the same gigawatt capacity of Tesla when they finish their currently constructed plants. 2020, 2021 also the CAPEX might be lower that should increase profitability if they don't enter into a new CAPEX cycle depending on what the market is saying. So just wanted to give you an overview here. It's not smart to go into the details of everything what is the profitability because it's actually the macro bet that means here. Is the management going to deliver of the promises or not? So it's an interesting comparison also to companies like Tesla. The company is profitable currently even if sales have dropped there have been profits. It's growing book value over time and not diluting shareholders which is also very, very important. So an interesting play let's conclude with the financial investment thesis. So from an investing thesis perspective I think that the upside is really there. If you look at the stock price it's 16 billion the market cap. If they really increase sales 7 times over the next 5 to 10 years it's very likely that the market cap will also increase 7 times. So this is the investment thesis. The upside 7x upside compared to what is the maximum loss. The maximum loss is unlikely to be 100% because somebody will come will take it over because of the technology because of the battery factories because of the exposure to the future tailwinds. So just the key thing to understand here is upside 7x, 10x, 5x over the next 5 to 10 years downside 30, 50, 70% and the downside is exerberated it's already 50% down from the highs of a few years ago because actual car sales in China have really, really slowed down. If we look at the latest developments, the latest sales we see how some things are good, electric vehicles are sold really well and still growing but some other things are really down. So it's always very difficult to sell cars. It's in a downtrend, the automotive industry is in a downtrend globally. So if you're not ready to buy now and add more in the downturn you might do as I do, I'll put this on the watch list I'll watch it over the next year or two and then if it really hits bargain, bargain, bargain territory then I might even dip my toe into it when compared to other, all other investments, potentials out there. Charlie Munger is really specific how the company has great management that can deliver on what they are doing which gives it an advantage against other companies. The quality of the cars isn't stellar, the quality of the batteries is already something better, something more important but they are learning, developing and if you have a lower cost base perhaps in China then in the US then you can do those things. So there is not really something to hold on like to call it a margin of safety technology can change, subsidies change, China government might change but their policies are very pro-electric vehicle and the upside will never be linear, it is always undulating and if you buy in a downturn which we are now already given the decline on the stock price you might do very, very well in the future. So this is BYD perhaps an idea to look elsewhere, it's traded OTC it's traded in Hong Kong so again you need an international broker or a good American broker to buy it which means it's not on the radar so much of Wall Street which might make it much more undervalued for the potential upside. Thank you for watching, looking forward to the comments and I'll see you in the next video.