On November 4th Beijing time, Berkshire Hathaway, a subsidiary of Warren Buffett, disclosed its financial report for the third quarter of 2023.
The financial report shows that Berkshire achieved revenue of $93.21 billion in the third quarter, better than market expectations of $89.882 billion, compared to $76.93 billion in the same period last year.
The net loss for the third quarter was 12.77 billion US dollars (approximately 93.2 billion RMB), marking the company's first quarterly loss this year; The company's net profit in the previous second quarter was $35.91 billion. In addition, the investment income loss in the third quarter reached 24.1 billion US dollars (approximately 175.9 billion RMB).
As of Friday's close, Berkshire Hathaway A rose 0.66%, with a market value of $772.63 billion.
The main reason for the loss is the decline in Apple's stock price
According to financial reports, Berkshire achieved revenue of $93.21 billion in the third quarter of this year, with a market expectation of $89.882 billion, an increase of 21.2% from $76.9 billion in the same period last year; The net profit attributable to the parent company suffered a loss of $12.767 billion, compared to a loss of $2.798 billion in the same period last year, marking the company's first quarterly loss this year. However, in the first three quarters, the company still achieved a profit of $58.649 billion, far better than a loss of $40.8 billion in the same period last year.
One of the main reasons for Berkshire's net profit loss in the third quarter was that Apple accounted for the majority of its stock portfolio. The stock price of this technology giant fell by 11.61% overall in the third quarter.
The report shows that Berkshire suffered a loss of $24.1 billion in investment income in the third quarter, but achieved a cumulative profit of $23.5 billion in the first three quarters. Approximately 78% of the total fair value of Berkshire's stock investments is concentrated in five companies: Apple $156.8 billion, Bank of America $28.3 billion, American Express $22.6 billion, Coca Cola $22.4 billion, and Chevron $18.6 billion.
Holding over a trillion yuan in cash
But even with these transactions, the company is still flush with cash. As of the end of the third quarter, Berkshire's total cash holdings reached a record high of $157.24 billion (approximately 1148 billion yuan).
The high valuation may be the reason why the company chose not to engage in large-scale transactions. Meyer Shields, a stock analyst at Keefe, Bruyette&Woods, an investment bank in New York, said that if valuations do not decline with rising interest rates, "the right thing to do is to do nothing.
In addition, the market generally expects that the positive impact of sustained high interest rates on Berkshire will outweigh the negative impact. Berkshire currently holds a large amount of cash assets, mainly short-term Treasury bills. With the efforts of the Federal Reserve to curb inflation, rising interest rates will make these assets more valuable.
Buffett recently reduced his holdings in BYD
Securities firm China reported on November 1st that according to documents from the Hong Kong Stock Exchange, Buffett's Berkshire Hathaway has reduced its stake in BYD's H-shares from 8.05% to 7.98%. Since the first reduction in holdings in August 2022, Berkshire Hathaway has sold over 138 million shares of BYD H-shares, with a reduction of over 60%.
According to Hong Kong Stock Exchange documents, on October 25th, Buffett's Berkshire Hathaway sold 820500 shares of BYD, with an average reduction price of HKD 245.86 per share, and the shareholding ratio decreased from 8.05% to 7.98%.
It is reported that Berkshire Hathaway purchased 225 million BYD H-shares at a price of HKD 8 per share in 2008, holding them for 14 years until the first reduction in holdings in August 2022. According to the disclosure regulations of the Hong Kong Stock Exchange, disclosure is only required for major shareholders to increase or decrease their holdings of stocks when they cross a certain integer percentage, and has been disclosed more than ten times so far.
According to documents from the Hong Kong Stock Exchange, after this reduction, Berkshire Hathaway holds 87.61 million shares of BYD H-shares. That is to say, Berkshire Hathaway has sold over 138 million shares of BYD H-shares, reducing its holdings by over 60%.