Chinese battery manufacturer Sunwoda completed its issuance of global depository receipts (GDRs) on November 14 and listed them on the Swiss Stock Exchange, becoming the fourth company also traded publicly in Shenzhen to successfully list GDRs in Europe.
This time, Sunwoda issued 28.759 million GDRs at a price of $15.30, raising about $440 million. The company has been deeply involved in the battery industry for 25 years, establishing a lithium battery industry chain that integrates R&D, design, production and sales of consumer batteries, power batteries and energy storage batteries.
In the first half of 2022, the company achieved revenue of 4.2 billion yuan ($595 million) for electric vehicle batteries, up 631.92% year-on-year, and the gross profit margin of this business increased by 2.37% compared with the same period of last year. According to data from the China Automotive Power Battery Industry Innovation Alliance, Sunwoda ranked fifth in China with a total installed capacity of 5.5 GWh from January to October.
The recent listing in Switzerland is closely related to Sunwoda’s development strategy. On November 6, the firm announced that Sunwoda Electric Vehicle Battery Co., Ltd., a holding subsidiary, would supply power battery packs for Volkswagen in Germany.
Liang Rui, the vice president of Sunwoda, predicted in a recent speech that production capacity may exceed 600GWh this year and reach 1TWh ahead of schedule next year. At the same time, he called for solving the transportation problem of power batteries between China and Europe, hoping to drive growth of the battery industry in Southwest and Northwest China.
With the acceleration of the interconnection of capital markets between China and Europe, the enthusiasm of A-share listed companies for issuing GDRs continues to rise. According to incomplete statistics from 21st Century Business Herald, since the beginning of this year, 32 listed companies have issued GDRs, covering new energy, high-end manufacturing, semiconductor, internet, medical care, consumption and other fields. Among them, GDRs of eight A-share companies have been successfully listed, raising about $3.34 billion.
25 Chinese companies chose the Swiss Stock Exchange, accounting for 78.13%. Three of them chose the London Stock Exchange, while four have unspecified listing destinations. As one of the largest exchanges in Europe, the Swiss Stock Exchange has a leading trading settlement system in the world, becoming another important market for Chinese enterprises to list overseas.
In addition, tool manufacturer GreatStar also completed a GDR release and will be officially listed on the Swiss Stock Exchange on November 15. The GDR issuance of companies such as LY iTECH, a leading enterprise in precision functional parts, Senior, a lithium battery diaphragm enterprise, and Hangke Technology, a solution provider of lithium battery smart factory, have been accepted or approved by the China Securities Regulatory Commission.
The issuance of GDRs connects Chinese and European markets. On the one hand, it helps broaden financing channels for A-share listed companies in global capital markets, while on the other hand, it provides a way for global investors to enter China’s capital market more deeply and share the fruits of China’s rapid economic development.