While the new forces of car making enterprises scrambled to land in the Hong Kong stock market and the US stock market, a number of Chinese lithium battery enterprises were planning to go public in Switzerland.
Recently, the lithium battery material manufacturer Keda Industrial Group Co.Ltd(600499) ( Keda Industrial Group Co.Ltd(600499) . SH) issued the announcement on terminating the non-public development of A-Shares in 2022 and applying for overseas issuance of global depositary receipts and listing on the Swiss stock exchange. The announcement said that the company plans to terminate the non-public offering of A-Shares in 2022 and apply for overseas issuance of global Depositary Receipts (GDR) and listing on the Swiss stock exchange. The number of A-Shares of new basic securities represented by GDR in this issuance shall not exceed 100 million, and shall not exceed 5.3% of the total share capital of the company’s common shares before this issuance.
In fact, Gotion High-Tech Co.Ltd(002074) ( Gotion High-Tech Co.Ltd(002074) . SZ) and Ningbo Shanshan Co.Ltd(600884) ( Ningbo Shanshan Co.Ltd(600884) . SH) have recently made the same choice. Industry analysts believe that the main reason behind the successive overseas listing of lithium battery enterprises is to obtain the continuous supply of international capital, improve overseas financing capacity, broaden corporate financing channels and enhance their overseas brand popularity and influence.
“The most important background is that regulators encourage listed companies to expand overseas financing channels and promote the internationalization of China’s capital market. At the same time, through the issuance of GDR, enterprises can open new overseas financing channels on the one hand and avoid institutional barriers on the other. With the increase of overseas issuance of GDR cases, more enterprises will be encouraged to raise funds overseas.” Director of the daily economic news said to Shen Meng.
policy east wind blowing
Recently, many listed companies in China are planning to issue GDR, which is driven by policies.
It is understood that global depository receipts (GDRs) refer to stocks or bonds that are publicly issued worldwide and can be traded in two or more financial markets. In 2018, relevant policies and supporting rules of Shanghai Luntong were issued and implemented.
In February this year, the CSRC issued the regulations on the supervision of the interconnection of domestic and foreign stock exchanges for depositary receipts business, expanding the exchange of domestic GDR issuing companies from Shanghai Stock Exchange to Shenzhen Stock Exchange, and the listing place of overseas GDR from the UK to Switzerland and Germany.
On March 16, the financial stability and Development Commission of the State Council held a special meeting to study the current economic situation and capital market problems. At the meeting, it was proposed that the Chinese government should continue to support all kinds of enterprises to list abroad. The CSRC also responded later that it should pay close attention to promoting the implementation of new regulations on the supervision of overseas listing of enterprises, support all kinds of qualified enterprises to list abroad, and keep the channels of overseas listing unblocked.
Under the east wind policy, a number of listed enterprises have issued announcements that they will disclose the matters of planning to issue GDR and go overseas for listing. It is believed that the recent issuance of GDR by many companies shows China’s determination to reform and develop at the capital market level, and is also regarded by the market as a new round of interconnection, opening-up and innovation of a shares.
According to public data, there were five previous cases of GDR issuance by Chinese Enterprises: China Yangtze Power Co.Ltd(600900) ( China Yangtze Power Co.Ltd(600900) . SH) issued Shanghai Luntong GDR in 2020 and was listed on the London Stock Exchange, raising a total of about US $2.011 billion, which is the largest GDR issuance of Chinese enterprises Huatai Securities Co.Ltd(601688) ( Huatai Securities Co.Ltd(601688) . SH), China Pacific Insurance (Group) Co.Ltd(601601) ( China Pacific Insurance (Group) Co.Ltd(601601) . SH), Sdic Power Holdings Co.Ltd(600886) ( Sdic Power Holdings Co.Ltd(600886) . SH) issued Hulun Tong GDR and listed on the London Stock Exchange, Haier Smart Home Co.Ltd(600690) ( Haier Smart Home Co.Ltd(600690) . SH) issued GDR and listed on the Frankfurt Stock Exchange.
Unlike before, many enterprises have chosen the Swiss stock exchange this time. “Switzerland is a permanently neutral economy. Generally speaking, the macroeconomic and financial environment is stable, and the Swiss Franc exchange rate is relatively stable, which is very beneficial to the continuous stability of the issuer’s valuation, including the market value.” Zhang Lei, member of Huatai joint securities Executive Committee, said.
help enterprises improve their international “voice”
Listing overseas is also helpful to enhance the international influence of Chinese lithium battery enterprises.
According to SNE research, the installed capacity of registered electric vehicle batteries in all countries in the world in 2021 was 296.8gwh, a year-on-year increase of 102.18%. Among them, China Shipbuilding Industry Group Power Co.Ltd(600482) battery installed capacity is 154.5gwh, accounting for more than 52% of the global market.
Despite the huge market scale, the market share of Chinese lithium battery enterprises in overseas markets still has great room for improvement. Taking Contemporary Amperex Technology Co.Limited(300750) ( Contemporary Amperex Technology Co.Limited(300750) . SZ) and Byd Company Limited(002594) ( Byd Company Limited(002594) . SZ) as examples, the overseas installed capacity of the two enterprises accounted for only 16.74% and 4.71% of the total installed capacity of the world respectively in 2021. Therefore, developing overseas markets is also one of the key tasks of Chinese lithium battery enterprises.
Gotion High-Tech Co.Ltd(002074) said in the announcement that it would make full use of the favorable opportunity of China EU capital market interconnection to enhance the company’s global brand influence, broaden overseas financial financing capacity and ensure the financial needs of the company’s international strategic development. Up to now, the company has reached strategic cooperation with a number of international customers and signed product sales orders to gradually build a global market system. This GDR issuance and listing will help to expand the global market share of the company’s products.
In fact, the plan of Gotion High-Tech Co.Ltd(002074) setting up factories overseas has been initially launched. In 2021, Gotion High-Tech Co.Ltd(002074) announced plans to invest and build factories in Europe and the United States, and planned to acquire Bosch Group’s factory in Gottingen, Germany, and establish its first new energy production and operation base in Europe. In the future, Gotion High-Tech Co.Ltd(002074) plans to increase the construction of power battery capacity and supporting industries in overseas markets such as Europe, North America and Asia, and build a new generation of power battery production line.
At the same time, the proportion of Gotion High-Tech Co.Ltd(002074) overseas sales revenue is also increasing year by year. According to the financial report data, in 2019, 2020 and the first half of 2021, the revenue of Gotion High-Tech Co.Ltd(002074) overseas regions (including Hong Kong, Macao and Taiwan) was 22 million yuan, 159 million yuan and 168 million yuan respectively, accounting for 0.45%, 2.36% and 4.74% of the total revenue respectively.
Not only lithium battery enterprises, but also upstream industrial chain companies urgently need to expand their business territory Keda Industrial Group Co.Ltd(600499) said in the announcement that the purpose of the proposed overseas listing is to meet the needs of the company’s business development, further improve the level of corporate governance and core competitiveness, and further promote the company’s globalization strategy. According to its 2021 annual report, last year, the company’s overseas operating revenue reached 4.116 billion yuan, accounting for 42.01%.
Ningbo Shanshan Co.Ltd(600884) also said that through listing in Switzerland, the company hopes to make full use of the support of the capital market, realize direct connection with the overseas capital market, improve the company’s overseas brand popularity and influence, and broaden its overseas financial financing capacity. In addition, Shanshan can also introduce overseas professional investment institutions and industrial investors to further optimize the equity structure of Shanshan.
Some people believe that, as a typical “capital intensive” industry, the new energy industry chain has always been an important place to attract gold. If enterprises want to join the top camp, it is the only way to embrace the capital market and find more financing channels. With the increasing demand in the downstream application market, lithium batteries have ushered in rapid growth, and the upsurge of overseas listing may continue or even increase in the future.
