Chinese Smart Power Grid Supplier Holystar Eyes $323m In STAR Market IPO

Shanghai Holystar Information Technology Co., Ltd, a developer of smart power grid networks based on internet of things (IoT), is looking to raise 2.2 billion yuan ($323 million) in an initial public offering (IPO) on Shanghai’s Nasdaq-style STAR Market.

It is looking to sell 25 million shares at 88.23 yuan ($12.9) apiece through the IPO.

Holystar’s IPO application received approval from China Securities Regulatory Commission on September 8 and the firm kicked off its subscription exercise on Thursday. The shares were oversubscribed 4,380 times, according to a company filing on Friday.

The proceeds from the IPO will be used to develop Holystar’s manufacturing bases in Shanghai and Quanzhou, as well as a research centre and a headquarters building in Shanghai. Additionally, it will also focus on fuelling the operating funds.

Chinese Huatai Securities’ subsidiary Huatai United Securities is the lead underwriter for the deal. Holystar will float the shares under the symbol “688330”.

The company, established in 2011 in Shanghai, produces and distributes intelligent power grid equipment, besides software. In addition, it also designs IoT-led communication modules and systems. Its clients include power giants such as State Grid Corporation of China, China Southern Power Grid, and Shanghai Electric Power.

Its annual revenues over the past three years derive mostly from State Grid, which accounted for 82 per cent of Holystar’s 2019 turnover. The prospectus shows that its annual revenues in 2017-19 stood at 252 million yuan ($37 million) in 2017, 415 million yuan ($61 million) in 2018, and 705 million yuan ($103 million) in 2019.

Holystar’s promoter shareholder Shanghai Hongyuan Investment will remain the largest shareholder with an 18.05 per cent stake, down 6.02 per cent, after the IPO. Other major shareholders include Pinhua Investment (6.02%), Shanghai Guohong Zhiyan (2.25%), Ningbo Yuanpan Investment (2.25%), and Shanghai Lingang Investment (1.12%). 

In 2015, Holystar had garnered an undisclosed Series A from Shanghai Hongyuan Investment, Shanghai Lingang Songjiang Venture Capital, Shanghai Yuanfan Investment, and Shanghai Guohong Venture Partners, a joint fund co-launched by Shanghai Industrial Investment (Holdings), Shanghai Municipal Development & Reform Commission and HYVIEW Group.