Sunwoda to Spin Off Car Battery Business
Shenzhen-based battery firm Sunwoda reportedly launched a spin-off for its automotive power battery business at the end of 2021. Its subsidiary Sunwoda Electric Vehicle Battery Co., Ltd. (EVB) will be listed as an independent company, and is expected to submit an IPO application in 2023 or 2024, 36Kr reported on Tuesday.
One investor told 36Kr that Sunwoda EVB is seeking a new round of financing, with an estimated amount of more than 3 billion yuan ($448 million) and an overall valuation of 20 billion yuan. After the last round of financing, the valuation of the enterprise was 12.4 billion yuan. If this round of financing goes smoothly, its valuation stands to increase by 61%.
On February 24, 19 investors including Li Auto, XPeng and NIO increased their capital in Sunwoda EVB with 2.43 billion yuan, and obtained about 19.5% equity of the company.
According to Sunwoda’s 2021 financial report, its power battery business revenue was 2.933 billion yuan, a year-on-year increase of 584.67%. However, the specific business accounts for only 7.85% of Sunwoda’s overall revenue. Consumer electronics batteries are still the core business of Sunwoda. In 2021, the firm’s revenue from its smartphone battery business was 20.795 billion yuan, accounting for more than half of the total revenue.
In the field of power batteries, since 2019, Sunwoda has reached cooperation agreements with Renault, Geely, Dongfeng Motor, GAC Motor, SAIC-GM-Wuling, and other car companies.
Some investors told 36Kr that the revenue of Sunwoda’s battery business in the first quarter of this year was nearly 2 billion yuan, which is close to 70% of its power battery business revenue in 2021.
The Chinese battery firm also intensively expanded its battery capacity. Since August 2021, Sunwoda has planned to achieve 130GWh power battery capacity in the provinces of Jiangxi, Shandong, Guangdong and Sichuan, with total investment exceeding 60 billion yuan.
SEE ALSO: Sunwoda Subsidiary Establishes Power Battery Joint Venture
Independent financing and spin-offs will undoubtedly help Sunwoda EVB raise more funds and speed up its capacity expansion. With the split of the power battery subsidiary, Sunwoda also can further expand its market share with more capital strength.