Jiangsu Horizon New Energy Technology, a Chinese manufacturer of lithium-ion battery separators, has raised 1.37 billion yuan ($195.4 million) from 11 investors to boost its valuation to $1 billion.
The five-year-old company offered a combined 19.68% of its shares at a price of 3.98 yuan ($0.57) apiece to the consortium led by investors including China Development Fund, an investment platform backed by the country’s largest policy bank, the China Development Bank (CDB), according to a recent stock exchange filing.
The financial details translate into a post-money valuation of over 69.6 billion yuan (approximately $10 billion) for Horizon.
As one of the lead investors, China Development Fund invested 224 million yuan ($31.9 million) in the deal. Jiangsu Jiequan, a government-linked regional industry investment fund from eastern China’s Jiangsu province, subscribed to 240 million yuan ($34.2 million) worth of shares, Horizon’s existing shareholder Changchai Co Ltd, a publicly-listed industrial enterprise, disclosed in the filing.
China Structural Reform Fund, GF Qianhe Investment, and CoStone Capital, among others, joined the round.
Horizon plans to invest the fresh capital in speeding up the construction of new manufacturing facilities in Shanxi, a plateau province in north China, as it seeks to “expand production and enhance competitiveness,” according to the filing.
The net proceeds are expected to help the Chinese producer of separators – an indispensable part of lithium-ion batteries that functions as a physical barrier for the electrode as well as an electrolyte reservoir for ionic transport – expand the adoption of its products across new energy vehicles, consumer electronics, and the overall energy storage industry.
Official statistics from China’s Ministry of Industry and Information Technology, the state regulator tasked with developing the country’s IT and electronic industries, estimated that China’s output of lithium-ion batteries in the first half of 2022 exceeded 280 gigawatt-hours, registering a year-over-year (YoY) increase of 150%. The government’s efforts to achieve carbon neutrality by 2060 have ensured the country’s status as the world’s biggest lithium-ion battery consumer for the past five consecutive years.
This tailwind has contributed to the rapid growth of Horizon’s valuation over recent years. At the price of 3.98 yuan per share, its latest stake value almost quadrupled from September 2019, when six investors including CMB International Capital had acquired a total of 8.33% shares in the firm for 1 yuan per share.
The new funding came amid its improved revenue status. The firm registered a net profit of 10.4 million yuan ($1.5 million) in the period of January to April 2022 against its revenues of over 100 million yuan ($14.3 million). That compared to the whole year of 2021, when it posted revenues of 98.9 million yuan ($14.1) and a net loss of 51.1 million yuan ($7.3 million), according to its audited financial details disclosed in the filing.