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Highlights
- BYD Co Ltd’s plans to publicly list its semiconductor segment have been suspended in the wake of a regulatory investigation.
- The China Securities Regulatory Commission (CSRC) has initiated a probe into Tian Yuan Law Firm, which was advising BYD on its public listing plans.
- The Shenzhen-based firm was looking to raise about 2.68 billion yuan (US$ 412~ million) from its IPO.
Chinese automobile giant BYD Co Ltd’s plans to publicly list its semiconductor segment have been suspended in the wake of a regulatory investigation.
The China Securities Regulatory Commission (CSRC) has initiated a probe into Tian Yuan Law Firm, which was advising BYD on its public listing plans.
Although the reasons for this investigation has not been revealed, the Shenzhen Stock Exchange said last week, on August 18, that it has shelved the evaluation process of BYD’s initial public offering (IPO) filling following the regulatory probe.
BYD IPO plans
BYD’s board of directors had approved the plans to launch BYD Semiconductor Co as a public company on the Shenzhen Stock Exchange's ChiNext in May this year.
The exchange, which follows tech-focused firms like Nasdaq, had gone on to greenlight the IPO application for evaluation in June.
The Shenzhen-based firm, which is said to be China's top automotive microcontroller chips maker, was looking to raise about 2.68 billion yuan (US$ 412~ million) from its IPO , as per its prospectus.
Also read: GlobalFoundries IPO: How to buy this semiconductor maker’s stock?
BYD IPO suspension & stock performance
China has been cracking down on businesses, especially in the technology sector, with the goal to curb “monopolistic” behavior. Although it has not been confirmed if BYD’s IPO suspension was in line with this crackdown, it has handed the parent company a major setback.
BYD, said to be the top Chinese automaker in terms of market cap, is backed by US-based investment giant Warren Buffett. Its stocks noted a significant rise after the announcement of BYD Semiconductor’s IPO plans.
BYD stocks currently record a one-year growth of over 264 per cent and that of about 49 per cent.
Previously, Chinese tech giants like Alibaba Group (NYSE:BABA) and Tencent Holdings have under the regulator’s radar.
Also read: Alibaba NFT market: Is the newly launched platform dazzling investors?
The CSRC’s probe saw the Shenzhen Stock Exchange shelf some 10 listing reviews, all of companies being handled by Tian Yuan.
Tian Yuan is known to be one of the law firms in China, having previously handled the IPO procedures of major played such as Bilibili and Nongfu Spring.
Bottomline
BYD Semiconductor is known to be a major market player in the global semiconductor industry, competing with international rivals like Germany’s Infineon and Japanese firm Rohm Semiconductor. Hence, many experts had forecast that it could quickly rocket to become one of the top Chinese automotive chip stock following its debut.
Now that its IPO process has hit a bump, investors may have to wait to see how far this projection comes true.
