BYD’s third IPO is coming. Days ago, Shenzhen Stock Exchange’s Entrepreneurship and Listing Committee’s review meeting approved its listing on the GEM board, signifying the success of BYD’s semiconductor IPO.
The listing process of BYD Semiconductor is not smooth. In 2021, the Shenzhen Stock Exchange suspended reviewing the IPO application by BYD’s chip unit due to a regulatory investigation. BYD resumed the process in early September 2021.
Why it matters
Though the last year saw a record high sales of EVs in China, the EV market has been troubled by the chip shortage. BYD’s IGBT chip ensures timely deliveries for consumers, saving BYD from chip shortage worries.
BYD Semiconductor is the biggest manufacturer of automotive-grade IGBTs in China and the second largest in the world. After BYD spun off its chip unit into a separate entity, this affiliate received rounds of funding, sending its estimated value from 7.5 billion yuan to 30 billion yuan. “This move helps BYD Semiconductor attract more capital, shore up its defense against risks, and improve its competitiveness,” commented BYD.
According to the recent prospectus material, the IPO intends to raise 2 billion yuan to fund power semiconductor projects, high-performance MCUs design, and high-precision BMS chip design. The released financial report showed that BYD Semiconductor’s revenue was 1.34 billion yuan, 1.096 billion yuan, and 1.441 billion yuan in 2018, 2019, and 2020 respectively, and the corresponding profit stood at 103 million yuan, 85 million yuan, and 184 million yuan.
According to the unaudited statistics from BYD’s chip arm, the company’s revenue in the first nine months of 2021 hit over 2.1 billion yuan, increasing by 171% over the same period of 2020. The profit reached 389 million yuan.
BYD is a car maker with two powerful wings: the battery manufacturing capability and chip-making unit. As other rivals are looking for partners to provide chips and batteries, BYD is better positioned to enlarge its presence and increase its influence.