BYD permitted by HKEX to hive off BYD Semiconductor for A-share listing

Shanghai (Gasgoo)- Hong Kong Stock Exchange (HKEX) confirmed on Oct. 22 that BYD Company Limited (called “BYD” or “the Company” for short) may proceed with the spin-off and separate listing of its non-wholly-owned subsidiary BYD Semiconductor Company Limited (“BYD Semiconductor”), BYD announced on Monday.

Photo credit: BYD Semiconductor

The spin-off will help BYD Semiconductor in further improving its multi-channel financing ability and brand effect, forming a sustainable competitive edge by strengthening the resource conformity and product R&D capabilities, making full use of the domestic capital market and seizing the opportunities of market development, so as to lay the solid cornerstone to become an efficient, intelligent, and integrated semiconductor supplier, said BYD.

BYD also noted that the spin-off will essentially enable BYD Semiconductor to enhance its corporate governance and financial transparency, and separate its business from those of the Company.

Upon completion of the spin-off, investors will appraise the strategies, risks and returns of BYD and BYD Semiconductor separately, and directly invest in relevant businesses independently, therefore making the assessments of the two companies' businesses more equitable.

According to BYD's statement, the spin-off and independent listing will not lead to the loss of BYD's control in BYD Semiconductor, will have no material impact on the continuous operations of BYD's other business segments, and will not harm BYD's independent listing status and the ability to continue as a going concern.

BYD announced on June 30 that its application to spin off BYD Semiconductor to ChiNext was accepted by Shenzhen Stock Exchange. The IPO progress was forced to be halted in mid-August due to a regulatory investigation into its advisory law firm and then resumed in early September.

According to the information updated by Shenzhen Stock Exchange on its website on Sept. 30, BYD Semiconductor’s listing plan was again suspended as the financial documents included in the IPO application files had expired.