Workers work on the assembly line at a factory of vehicle manufacturer BYD Auto in Xi'an, northwest China's Shaanxi Province. File photo: Xinhua

Shares of Chinese electric vehicle (EV) giant BYD fell by nearly 12 percent on Tuesday on speculation that Warren Buffett's company may be unloading its BYD holdings.

Amid the widespread speculation, BYD said on Tuesday that it has not seen any filing by major shareholders regarding reducing holdings in the company as required under rules of the Hong Kong exchange, according to news website jiemian.com.

The company further added that its operations remain normal and all businesses are conducted in an orderly manner.

Meanwhile, Citigroup increased its holdings by 225 million share of BYD's Hong Kong-listed stock, according to data from the Hong Kong Stock Exchange on Tuesday.

The change matches the size of Berkshire Hathaway's position in BYD, fueling speculation that Buffett's company may be unloading its holdings.

BYD said that a major shareholder's reduction in holdings requires an equity declaration, and the Hong Kong exchange's equity disclosure platform did not show any information on the reduction, according to a report in Jiemian.

According to data from the Hong Kong bourse, no other major shareholders with more than a 5 percent stake in BYD have made declarations on changes in their holdings, including Berkshire Hathaway, which has a 7.73 percent stake.

Based on available information, it cannot be confirmed whether Buffett's firm has made a reduction or not, and any change should be subject to an official announcement, Li Daxiao, chief economist at Shenzhen-based Yingda Securities, told the Global Times on Tuesday.

However, the speculation triggered a plunge in BYD's share price. BYD's Hong Kong-listed stock sank 11.93 percent as of Tuesday's closing.

Western Capital Group LLC, which is 100 percent owned by Buffett's Berkshire Hathaway Energy, was BYD's fourth-largest shareholder with 225 million shares, or 7.73 percent, according to BYD's 2022 first-quarter report. 

Berkshire first bought 225 million shares in BYD in September 2008 for HK$1.8 billion ($230 million).

Li noted that BYD has good development prospects and a high market valuation.

BYD was viewed as a bellwether stock for the Chinese EV sector and had a share surge in recent months. Its share price reached a record high of HK$325 in June, thanks to government stimulus measures designed to boost auto consumption.

The company posted record sales in the first half of 2022. It sold 641,400 new-energy vehicles, up 315 percent year-on-year, and surpassed Tesla to become the global sales leader in the sector.

The volatility in BYD's stock price could also be a result of the market adjusting after a rally in the new-energy vehicle sector, Yang Delong, chief economist at Shenzhen-based First Seafront Fund Management Co, told the Global Times on Tuesday.

"Some short-term speculations will not change the long-term investment value of enterprises and the good development prospect of China's new-energy vehicles market," Yang said.