The public listing of SVOLT, a Chinese lithium-ion battery systems provider, was approved by the Shanghai Stock Exchange on November 18. The update means that SVOLT, currently the only unlisted firm among the world’s top 10 power battery manufacturers, is set to officially enter the capital market.
SVOLT plans to issue 25% shares and raise 15 billion yuan ($2.01 billion). Based on this calculation, the valuation of the firm will reach 60 billion yuan, making it a new unicorn in the power battery industry. SVOLT will use the funds to increase research and development of cobalt-free cathode materials, cobalt-free batteries and systems, and “short blade” batteries and systems.
SVOLT was formerly the power battery division established by Great Wall Motor in 2016, and Wei Jianjun, Chairman of Great Wall Motor, holds nearly 40.26% equity of SVOLT. Once the firm is successfully listed, it will further raise Wei’s wealth. According to the Hurun Rich List 2021, Wei and his wife’s wealth nearly quadrupled from 45 billion yuan in the previous year and soared to 218 billion yuan, ranking seventh.
Before 2018, SVOLT was only an unknown player, but in just four years, it has advanced to become one of the top 10 ten in the world. According to SNE Research, a Korean market research institution, the cumulative installed capacity of SVOLT reached 2.6 GWh in the first half of 2022, an increase of 160% year-on-year, ranking among the top 10 globally.
SVOLT has established many production and research bases in China. It has also announced six production expansion plans this year, involving 182.6 GWh battery capacity, with a total investment of 67.6 billion yuan. The company will build R&D bases in Europe, South Korea and other locales to construct a global R&D, production and service network.
In addition to capacity expansion, SVOLT has achieved remarkable results in attracting customers. According to the prospectus, it has reached cooperative relations with vehicle enterprises such as Great Wall Motor, Leapmotor, Geely, XPeng, Li Auto, Seres and NETA Auto, and has carried out business cooperation with Stellantis Group.
According to the prospectus, the company’s operating income from 2019 to 2021 was 929 million yuan, 1.736 billion yuan and 4.474 billion yuan respectively, with a compound growth rate of 119.42%. However, from 2019 to 2021, SVOLT still relies on support from Great Wall Motor. The situation has only reversed since the first half of this year.
During this period of rapid expansion, the profitability of SVOLT has not been guaranteed. From 2019 to 2021, the net losses attributable to shareholders reached 326 million yuan, 701 million yuan, 1.154 billion yuan and 897 million yuan respectively. As of the first half of this year, accumulated unrecovered losses were 1.597 billion yuan, and no profit had been achieved.
In 2021, the R&D expenditure of SVOLT reached 724 million yuan, up 90.43% year-on-year, accounting for 16.18% of operating income. As of June 30, 2022, SVOLT had 2,360 technical personnel, accounting for 19.58% of the total number of employees. There are 527 technical personnel with master’s degree or above, including 36 with a doctoral degree.