Sunwoda terminates HK IPO, Xiaomi invests 1.7 billion yuan

Sunwoda announced on October 29 that it is terminating its planned initial public offering in Hong Kong, a process that had been in preparation for over a year. Concurrently, the company disclosed that Xiaomi will invest 1.7 billion yuan in its subsidiary, Sunwoda Power. This transaction reduces Sunwoda's ownership stake in the subsidiary to 22.78 percent, resulting in the deconsolidation of the power battery division from the parent company's financial statements. TMTPost reported the story. The company stated that the decision was based on a comprehensive consideration of market conditions, internal changes, and development plans. The deconsolidation is expected to increase net profit by 3.2 billion to 4.5 billion yuan in 2026. Sunwoda's revenue for the first three quarters of 2026 reached 63.462 billion yuan, a year-on-year increase of 45.78 percent, marking the best performance for the same period in its history. However, net profit attributable to shareholders fell 56.37 percent year-on-year to 613 million yuan.

The net profit for the third quarter alone was 10.5671 million yuan, a decrease of 98.08 percent from the previous year. Before formally filing for the IPO, Sunwoda participated as a cornerstone investor in four other industry chain companies, spending approximately 127 million HKD. The market interpreted this as a preparatory exercise for the listing process. Since 2026, approximately 20 A-share companies have terminated their plans to list in Hong Kong. The first-day break rate for new HK stocks reached 50 to 60 percent in September. The pricing logic for lithium battery assets in HK has shifted from sector imagination to earnings certainty. Sunwoda Power reported a net loss of 3.169 billion yuan in 2025, which narrowed to 324 million yuan in the first half of 2026. As of June, the subsidiary's total liabilities were 57.24 billion yuan, with a debt-to-asset ratio approaching 84 percent. Li Auto increased its stake in Sunwoda Power to 11.17 percent in September for 2.65 billion yuan, becoming the second-largest shareholder.

Li Auto had previously invested 400 million yuan in 2022 and established a joint venture with Sunwoda. The combined investment from Xiaomi and Li Auto exceeds 4.3 billion yuan. Sunwoda's energy storage business accounted for only 4.6 percent of revenue in the first half of 2026, the lowest among eight major listed power battery companies. Global energy storage cell shipments exceeded 460 GWh in the first half of 2026, a year-on-year increase of approximately 94 percent. Sunwoda ranked ninth in large-scale and commercial energy storage cell shipments. The company co-established a 1 billion yuan energy storage asset fund in October, with an 8-year operating period. The deconsolidation will remove 57.2 billion yuan in liabilities from the consolidated balance sheet, reducing the debt-to-asset ratio by more than 10 percentage points.