* Buffett declines comment on BYD stake plans
* BYD shares up 3.7 pct, after rising as much as 4.4 pct
* BYD launches first premium multipurpose vehicle
* Buffett, Gates to host philanthropy dinner later Weds (Adds details of MPV launch, rivals, shares)
By Alison Leung and Fang Yan
HONG KONG/BEIJING, Sept 29 (Reuters) - Billionaire investor Warren Buffett has discussed the possibility of raising his 10 percent stake in car and battery maker BYD Co Ltd, a Chinese newspaper reported on Wednesday, sending BYD shares up over 4 percent.
In the past week, analysts and investors have speculated that Buffett, who is making a closely watched tour of China with former Microsoft Chairman Bill Gates, might instead sell down his stake after the automaker hit several bumps on the road.
That included sliding sales, delayed plans to export its electric cars and a legal dispute with the Chinese government over land it wants to develop.
"We wouldn't comment on what we are going to do," Buffett said on the sidelines of an event in Beijing when asked about the prospect of increasing his BYD stake.
BYD shares rose as much as 4.4 percent in Hong Kong, outpacing the broader Hang Seng Index's 1.3 percent rise.
China Business News cited BYD sources as saying Buffett had a closed-door meeting on Tuesday night with BYD officials in which the possibility of increasing the 10 percent stake in BYD held by Buffett's Berkshire Hathaway was the major topic.
But it was unknown whether they had reached any conclusion, the report added.
"This is a good thing for BYD," said Zhang Jing, an analyst at Phillip Securities (HK) Ltd. "If (Buffett) raises his stake at the current high price levels, that would be a vote of confidence, for sure."
STRONG PERFORMER?
Gates and Buffett, the world's second- and third-richest men, respectively, have travelled to several Chinese cities this week, meeting with Chinese businessmen and researchers, and will attend a dinner on Wednesday evening during which the two will speak to some of China's growing crop of rich entrepreneurs about charity.
Buffett, 80, is visiting China almost two years after Berkshire's affiliate MidAmerican Energy bought 10 percent of BYD.
That investment has yielded enviable returns, with the stake now worth $1.45 billion, over six times the original $230 million purchase price.
Still, that value is far below the peak of $2.5 billion reached last October.
Buffett and Gates were in Beijing on Wednesday to attend a BYD ceremony for the launch of the company's first premium multipurpose vehicle (MPV).
The car, the M6, will allow the car maker to tap the fast-growing premier MPV market, now dominated by General Motors and Honda Motor. BYD's portfolio now includes sedans only.
BYD shares have risen about 19 percent in the past two weeks on Buffett's visit.
The stock's performance lags that of its main rivals, however. Earlier on Wednesday, car maker Brilliance China hit a record of HK$5.52 on expectations of higher car sales in the coming months, Geely rose nearly 4 percent and Dongfeng Motor Group surged nearly 7 percent.
"The stock looks expensive but Coca-Cola also grew up from a small company," said Zhang. Shares of BYD, which stands for "Build Your Dreams", are trading at around 25 times 2010 projected earnings. (Writing by Don Durfee; Editing by Ken Wills and Muralikumar Anantharaman)