BYD: Global EV Market Leader with Highly Indebted Subsidiaries
Since May 2025, the stock of Chinese electric vehicle pioneer BYD has roughly halved in value. In the first half of the year, revenue fell by 7.1% to RMB 344.8 billion. Net income dropped by 20.5% to RMB 12.3 billion. Sales volume shrank by just under 16% to about 1.8 million vehicles. One reason is weak domestic demand, where a fierce price war is raging. Founder and CEO Wang Chuanfu also attributes the decline to a bottleneck in production of the second generation of the company’s proprietary Blade Battery. A bright spot is the overseas business. Approximately 792,000 vehicles were exported in the first six months, up 68%. This accounts for 44% of total sales. Outside China, BYD achieves a gross margin of 22%; overall, it is just under 19%. Following weak figures at the start of the year, profits did rebound by 30% in the second quarter. However, BYD still fell short of analysts’ expectations.
Things could therefore get heated at the extraordinary general meeting on Tuesday, September 29, in Shenzhen. Investors who want to participate live will have to get up early, as the meeting begins at 10 am local time, which is 4 am German time. The most sensitive item on the agenda is a guarantee program of up to RMB 50 billion (equivalent to just over EUR 6.5 billion). Deposits, receivables, and bills of exchange will be pooled into a single fund, known as an “asset pool.” In this way, the parent bank secures financing for its subsidiaries. Up to RMB 45 billion is earmarked for domestic subsidiaries whose liabilities account for at least 70% of total assets. This shows just how heavily the domestic plants rely on debt financing and the backing of the parent company.
The Board of Directors is expanding from six to nine members. In the future, employees will elect one member. Independent Director Zhang Min is stepping down because Chinese regulations limit the term of office to six years. His colleague Cai Hong-ping, a former investment banker at Deutsche Bank and UBS, remains on the board as a non-independent member.
New additions include an engineer, an automotive expert, and an auditor. In addition, the board secretary will have expanded audit responsibilities. He is expressly required to “monitor and immediately investigate significant anomalies in reports, including abnormal financial data and abnormal operational matters.” While this sounds dramatic, it primarily implements new Chinese regulatory requirements. Following the price drop, the stock is relatively moderately valued. The shares, which are tradable in Germany, currently cost EUR 8.83. Based on 2027 earnings estimates, the P/E ratio is around 12.5.
Vidac Pharma: CEO Sells Shares to Fund the Company
Vidac Pharma has experienced a price plunge similar to that of BYD. Since January, the stock has lost around 50% and is trading at about EUR 0.41. Its market capitalization is now only EUR 22 million. The company is registered in London, but its shares trade primarily in Germany, while its operations are mainly based in Israel. That is set to change, not least due to the uncertain political situation in the Middle East. At the virtual annual general meeting on Wednesday, September 30, at 9:30 am German time, shareholders are expected to approve a licensing agreement with Eutopos Pharma. The French sister company, based in Strasbourg, will in the future raise capital, advance clinical trials, and market the active ingredients in Europe. Eutopos has already been accepted into the regional life sciences network Quest for Health. This promises access to clinical centres, funding and potential partners. For Vidac, this is more than just a change of location. European investors and pharmaceutical companies are easier to reach when development takes place right on their doorstep.
Moreover, it is primarily about money. Vidac’s shares have a par value of GBP 1.00. The market price is well below that. British corporate law prohibits the public offering of new shares below par value. This effectively blocks a standard capital increase. The solution is a workaround. Founder and CEO Prof. Dr. Max Herzberg is selling shares on the open market. Rather than pocketing the net proceeds, he is passing them on to the company. In return, he receives new shares whose nominal value is topped up from a company reserve. The sales, which caused some unease in the mandatory disclosures, are based on an agreement dating back to 2024. In March, Vidac officially announced further sales under the same arrangement. Overall, the board is to be authorized to issue new shares equivalent to just over 17% of the existing share capital. Up to GBP 5 million of this is earmarked for this model, among other things, with the remainder relating to share options. A traditional capital increase in exchange for cash contributions would only be possible if the share price rises to at least GBP 1.00. That would represent nearly a threefold increase. The half-year report is also due to be published on the day of the annual general meeting. As a research-focused company, however, the figures are likely to be more of a side note.
Ointments Aim to Curb Cancer Cells’ Hunger for Sugar
Vidac Pharma’s business model is based on a phenomenon described by German Nobel laureate Otto Warburg about 100 years ago. Cancer cells alter their metabolism. They burn vast amounts of sugar to grow faster. An enzyme called hexokinase-2 binds to the cell’s powerhouses and simultaneously blocks its built-in emergency brake—programmed cell death. Vidac’s active ingredients break this bond. The sugar rush collapses, and the cell undergoes controlled death. Healthy skin cells primarily use a different variant of the enzyme and are therefore spared.
The most important drug candidate is VDA-1102, being developed as an ointment. It targets actinic keratosis, a precursor to non-melanoma skin cancer caused by sun damage. In an earlier Phase 2a study, the median number of skin lesions decreased by 64.6% compared to a placebo. The typical inflammation associated with common therapies did not occur. The pivotal Phase 2b study involving 39 patients is underway at the Wuppertal-based research centre CentroDerm. The last patient visit took place on September 9. The results, including tissue samples, are expected to be available in the coming weeks. For a global regulatory trial, Vidac will likely need to rely on partners from the pharmaceutical industry. Strong Phase 2b data would be the best ticket to entry. A second indication is cutaneous T-cell lymphoma, a cancer affecting certain immune cells in the skin. In an interim analysis, VDA-1102 achieved a response rate of 56%. Further potential is offered by VDA-1275, a molecule targeting solid tumors. It is being tested in laboratory and animal studies against colorectal, liver, lung and prostate cancer. Initial data suggest that it could be used to reduce the dose of traditional chemotherapy drugs such as cisplatin.
FedEx: Calm After Restructuring Does Not Shield Against Friction
The FedEx annual shareholders’ meeting is also unlikely to proceed entirely without friction, even though the logistics group appears to be a calm harbour compared to Vidac and BYD. The shareholders’ meeting, which will also be held entirely virtually, begins today, Monday, September 28, at 8 am in Memphis, which is 3 pm German time. In addition to the election of eleven directors, three shareholder proposals are on the agenda. They call for an independent board chair, lower thresholds for special meetings, and a report on the risks associated with shipping abortion medications. Management opposes all three proposals. The proposals are unlikely to stand much of a chance of success. The vote on executive compensation will also be closely watched, as approval last year was weaker than usual. For CEO Raj Subramaniam, however, the meeting is likely to be more of a formality than a test.
On June 1, the company spun off its freight division, FedEx Freight, and took it public as an independent company. FedEx closed the fiscal year ending in May with revenue of USD 94.7 billion, an 8% increase over the previous year. Profit after taxes rose from just under USD 4.1 billion to over USD 4.4 billion. The cost-cutting program Network 2.0, which merges the package delivery service and the express network, saved over USD 1 billion in the past fiscal year. That figure is expected to reach USD 2 billion by the end of 2027. Because FedEx is switching to a calendar-year reporting cycle, the current forecast covers the seven months through December. It projects adjusted earnings per share of USD 16.90 to USD 18.10.
The stock market nevertheless reacted with slight disappointment to the latest figures, as the outlook had promised more. Over the past twelve months, the share price has nevertheless risen by nearly 50%. For 2027, analysts expect earnings per share of around USD 20.84. At the current price of USD 285.85 (EUR 250.55), this results in a P/E ratio of just under 14. For a global market leader, that is a moderate valuation. However, the dividend yield of about 1.8% leaves something to be desired. The German competitor DHL Group offers roughly double that.
Conclusion: Who Will Emerge as the Winner from this “Week of Truth”?
This week’s three annual shareholder meetings represent three levels on the risk ladder. FedEx is likely to have the calmest proceedings, as the company offers predictable earnings at a reasonable valuation. BYD is undervalued relative to its own history, but is struggling with a difficult situation in its home market and must prop up its highly indebted domestic subsidiaries. Vidac Pharma is the most speculative, but also the most promising bet. Here, it is not balance sheet metrics that will determine the share price, but rather the clinical trial data from the coming weeks and whether a strong partner can be found. If successful, shareholders can expect a surge in the share price.
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