The ChiNext Listing Committee at the Shenzhen Stock Exchange reviewed and approved BYD Semiconductor’s IPO application on Thursday. According to the prospectus, the firm plans to raise 2.686 billion yuan ($422.5 million) in the transaction, to be allocated for investment in industrialization and upgrading projects of emerging power semiconductor chips, R&D and industrialization projects of power semiconductors and intelligent control devices, as well as to supplement working capital.
In June 2021, the company submitted a prospectus to the Shenzhen Stock Exchange. It is reported that the company’s IPO audit was suspended because its issuer’s law firm was undergoing a legislative investigation conducted by China Securities Regulatory Commission (CSRC). After the law firm issued the review report, the firm resumed its IPO and listing review in early September.
Founded in 2004, the company was originally a business unit of major Chinese automaker BYD, which was not formally split and independent until 2020. According to the prospectus, BYD, as its controlling shareholder currently, held 325 million shares of the company, accounting for 72.30% of its total share capital before issuance. Moreover, Wang Chuanfu, the founder of BYD, was the actual controller of these shares.
The firm is the largest domestic manufacturer of IGBT complying with Automotive Grade standards. The prospectus showed that the firm’s revenues in 2018, 2019 and 2020 reached 1.34 billion yuan ($210.8 million), 1.096 billion yuan ($172.4 million) and 1.44 billion yuan ($226.5 million), respectively. Its net profit showed a downward trend during the same period, which was 104 million yuan ($16.359 million), 85.1149 million yuan ($13.388 million) and 58.6324 million yuan ($9.222 million), respectively. The company said that a declining performance in 2019 was mainly due to subsidies withdrawals in the new energy vehicle industry, while the main reason for the decline in its performance last year was the implementation of stock option incentives.
In addition, the firm has received many star investment and capital investment. Before its IPO listing, the company had completed two rounds of financing. Previously, in May last year, 14 investment institutions including Sequoia China Investment Management LLP , CICC Capital, SDIC Innovation Investment Management Co., Ltd. and Sequoia Capital were introduced into Round A financing, and a total of 1.9 billion yuan of financing was obtained by the company.
Less than 20 days later, the company quickly completed its A + round of financing worth 800 million yuan ($125.84 million). 30 strategic investors were introduced in this round, including SK Group, Hubei Xiaomi Changjiang Industrial Investment Fund Management Co., Ltd. CMB International, Lenovo Group Limited, CITIC Private Equity Funds Management, Semiconductor Manufacturing International Corporation, SAIC Capital, BAIC Capital and Shenzhen Huaqiang. In these two rounds of financing, the company completed a total of 2.7 billion yuan ($424.7 million) of financing, with a post-investment valuation of 10.2 billion yuan ($1604.5 million).