CosMX, battery supplier to Dell and HP, seeks US$490 million IPO in Shanghai as Star Market looks beyond Ant Group’s halt

CosMX plans to raise 3.25 billion yuan (US$490 million) through selling 158 million shares in Shanghai at 20.56 yuan per share

The valuation prices the company at 46 times its estimated 2020 earnings, according to its prospectus

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A sign for STAR Market, China's new Nasdaq-style tech board, in Shanghai on July 22, 2019. Photo: Reuters

Published: 3:12pm, 12 Nov 2020Updated: 10:40pm, 12 Nov 2020

Zhuhai CosMX Battery, a supplier of lithium ion batteries to Dell, Hewlett Packard and other global electronics companies, is seeking an initial public offering (IPO) on Shanghai’s Star Market, becoming the second manufacturer in the field to tap the bourse for capital.

CosMX plans to raise 3.25 billion yuan (US$490 million) through selling 158 million shares on the Nasdaq-like market in Shanghai at 20.56 yuan per share, or 46 times its estimated 2020 earnings, according to its prospectus.

The pending listing is a relief for investors and analysts, after Chinese regulators last week mothballed the largest IPO in global finance, stopping Ant Group’s US$35 billion dual listing in Shanghai and Hong Kong 48 hours before trading was due to commence. The plan by the battery maker – established in 2007 in the Guangdong provincial city of Zhuhai, across the river from Macau – shows that it is business as usual in the stock exchange that was created last year at the behest of the Chinese president.

“China wants to better use the Star Market to nurture the growth of world-class technology businesses,” said Zhou Ling, a fund manager with Shanghai Shiva Investment. “A listing by a promising battery producer will cement investors’ belief that the board is home to top quality firms with potential to become global powerhouses.”

World's top 15 venues for initial public offerings, year to September 15, 2020. Source: Refinitiv

CosMX also produces batteries for cars that uses start-stop technology, which turns off the engine when the vehicle comes to a stop and restarts it once the driver releases the brake pedal.