China’s Sunwoda Electric Vehicle Battery (EVB) is moving towards a domestic initial public offering (IPO) that could become another blockbuster listing by an EV battery maker.
Shenzhen-based Sunwoda EVB, a spinoff of publicly-traded Sunwoda Electronic Co, officially filed for an IPO application with the China Securities Regulatory Commission (CSRC), according to updates on the CSRC website earlier this week.
It also signed an agreement with CITIC Securities to receive a pre-listing tutorial from the domestic investment bank.
The development comes about three months after the parent group disclosed in a July 15 regulatory filing its decision to spin off the EV battery unit for a separate listing on the startup board ChiNext in Shenzhen.
Chinese EV battery makers have doubled down on efforts to raise capital to fuel their aggressive global expansions amid the country’s dominance of the global transition to EVs.
After the $1.28-billion Hong Kong IPO by CALB in October 2022, REPT Battero Energy is reportedly weighing a $1-billion public share sale in the city this year.
Sunwoda EVB last raised capital in June, when eight domestic investors including BOC Financial Asset Investment and a 10-billion-yuan ($1.4 billion) fund managed by China Life Private Equity Investment invested a total of 1.65 billion yuan ($225.7 million) in the firm for a 4.64% stake.
The financial terms of the earlier investment valued Sunwoda EVB at almost 35.6 billion yuan ($4.9 billion) post-money. In comparison, Sunwoda, which owns approximately 39.7% of Sunwoda EVB through a subsidiary, had a market cap of just over $36.1 billion upon the market closing on October 18.
Sunwoda, established in 1997 forayed into the EV battery sector in 2008 by developing products such as EV battery cells and battery management systems (BMS) in-house, before the official establishment of Sunwoda EVB in 2014.
Sunwoda EVB is looking to tap the stock market for liquidity after closing the June investment and another two big-cheque deals in 2022. The firm inked agreements with 19 investors in February 2022 to raise 2.43 billion yuan ($332.4 million) in its Series Pre-A round. Later the same year, it pocketed 6 billion yuan ($820.6 million) in a Series A round.
Its investors include the country’s EV manufacturers Li Auto, Nio, and Xpeng, as well as traditional automakers such as the state-owned SAIC Motor, Guangzhou Automobile Group, and Dongfeng Motor Corporation. IDG Capital and the National Green Development Fund, an 88.5-billion-yuan ($12.1 billion) fund led by China’s Ministry of Finance, were among the investors of the venture rounds.
Sunwoda EVB has yet to turn a profit, although it was ranked ninth among the world’s 10 biggest EV battery producers in 2022, with a market share of 1.8% globally, based on a report by Seoul-based SNE Research.
While its net loss increased slightly to 1.09 billion yuan ($149 million) in 2022 from 1.05 billion yuan in the prior year, Sunwoda EVB’s revenue quadrupled to over 12.9 billion yuan ($1.8 billion) last year from just under 3 billion yuan in 2021, according to unaudited financial results disclosed in the July filing by Sunwoda.