Warren Buffett-backed BYD presses ahead with plans to list semiconductor unit on Shenzhen’s ChiNext tech board
- BYD says its legal advisers approve of the plan to go ahead with the spin off and listing of the 72.3 per cent-owned semiconductor unit
- Investors cheer BYD’s move for the semiconductor unit as they push the company’s Hong Kong and mainland listed shares at least 4.9 per cent higher
BYD, the battery and carmaker that counts Warren Buffett’s Berkshire Hathaway among its investors, has proposed a plan to spin-off and list its semiconductor unit on the Shenzhen Stock Exchange.
The Shenzhen-based carmaker’s plan to list its semiconductor business on ChiNext, the Nasdaq-styled tech board, comes amid intense competition in the world’s largest market for electric vehicles. A spin off of the chip unit would enable the company to focus on its core business of new energy vehicles and batteries and “expand into urban rail transit”, according to Zhong Lun.
The Hong Kong-listed shares of BYD rose 5 per cent to HK$149.10 in midafternoon trading, while its Shenzhen-listed shares added 4.9 per cent to 153.73 yuan.
BYD had a 12.9 per cent share of China’s new energy vehicle market in 2020, trailing the 14.7 per cent share by SAIC-GM-Wuling and ahead of Tesla’s 12.4 per cent, according to data from China Association of Automobile Manufacturers.
BYD’s semiconductor unit develops, makes and sells power semiconductors, integrated circuits, intelligent sensors and optoelectronic devices. It owns an integrated industrial chain that includes chip design, wafer manufacturing, assembly, testing and downstream applications.
01:47
Behind the scenes at BYD Auto: China’s biggest electric vehicle factory
Last year, the semiconductor unit made a net profit was 320 million yuan and had net assets of 3.19 billion yuan, according to Zhong Lun.
The spin-off and listing proposal is still awaiting approval of shareholders, Hong Kong and Shenzhen stock exchanges and the China Securities Regulatory Commission.