© Reuters.
Hebei Gellec New Energy Science & Technology Co., a Chinese battery manufacturer supported by electric vehicle giant BYD Co (SZ:)., is considering an initial public offering (IPO) in Hong Kong next year. This strategic move comes as the company shifts its focus away from its initial plans for a mainland China listing.
In a significant pivot, Gellec has initiated preliminary discussions with potential advisers to lay the groundwork for a share sale that could potentially rake in several hundred million dollars. The anticipated IPO would potentially value the company at around $2 billion.
The decision to target the Hong Kong market follows Gellec’s withdrawal of its application for an A-share listing on a mainland Chinese exchange in September, where it sought to raise 1.3 billion yuan ($178 million). Positioned in Yongnian, Hebei province, Gellec specializes in wet-process lithium-ion battery separators, a critical component in electric vehicle batteries.
BYD Co., which holds more than a 2% stake in Gellec, has been instrumental to the firm’s operations, contributing over half of its revenue—691 million yuan—in the first half of the previous year. During this period, Gellec reported a net income of 130 million yuan.
The broader context for Gellec’s change in direction includes regulatory headwinds and an economic downturn that have dampened the prospects for first-time share sales across Asia, particularly in China. The China Securities Regulatory Commission has been cautious with IPO approvals to maintain market stability, while companies like Syngenta Group have postponed their own Shanghai IPOs due to market fluctuations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.
