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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
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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.
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BYD Semiconductor, owned 72.3 per cent by BYD, is fit for a separate listing on the mainland, according to the recommendation of its legal advisers, mainland law firm Zhong Lun, BYD disclosed in a filing to the Hong Kong stock exchange on Tuesday evening.
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.
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BYD first announced the spin-off plan in December, but did not say which exchange it would seek to list the subsidiary. “The spin-off listing of BYD Semiconductor will help it further improve the … financing capacity and brand recognition, and therefore improve the sustainable competitive strengths in the long term,” BYD said in its 2020 annual report.
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