Next CATL? Lithium-Ion Battery Producer Greenway Files for Star Market IPO
The firm’s revenue has grown at a 19% CAGR since 2017, while the net profit has more than doubled over that period. Yet, it needs more capital to pull through the pandemic.
Guangdong province-based battery maker Greenway Technology (博力威科技) has filed a prospectus (in Chinese), intending to go public on the Star Market, China’s new Nasdaq-esque experimental trading platform. (Check out our latest quarterly overview of the tech board.)
The company’s operating income has been growing steadily over the past three years, from CNY 725 million (around USD 100 million) in 2017 to CNY 1 billion (USD 142 million) in 2019. Despite the stiff competition in the field, the gross profit margin has been increasing, too: it was 18.70%, 20.29% and 24.49% in 2017, 2018 and 2019 respectively.
Founded in 2010, Greenway designs and manufactures lithium-ion batteries for electric bikes, scooters and motorcycles, as well as for some consumer electronics products, such as laptops and power stations. Its downstream is ample and includes numerous small European brands: German Prophete, Danish Promovec A/S, Romanian Eurosport DHS and French manufacturer Francaise Du Cycle, to name a few. In China, it is one of the key suppliers of e-scooter producer NIU Technologies (NIU:NASDAQ).
As the COVID-19 pandemic is jeopardizing consumer demand overall, the micro-transportation tools sector is also profoundly affected. To survive, the upstream players are relying on short-term deals with electronic vendors. At the same time, they must have extra capital to pay their workers and keep up with the ever-accelerating R&D race in the industry. Is Greenway applying for an IPO out of necessity? Certainly, yes.