EV Battery Maker Farasis Lists At Premium On STAR Market, Raises $484m

Chinese electric vehicle batter producer Farasis Energy (Gan Zhou) Co., Ltd on Friday listed at a premium on the Nasdaq-style STAR Market of the Shanghai Stock Exchange (SSE) after raising a total of 3.4 billion yuan ($484 million), per a company filing with the bourse. 

Ganzhou-based Farasis sold 214.13 million shares at a price of 15.9 yuan ($2.27) apiece. It opened the day at 34 yuan ($4.9), up over 110 per cent compared to its IPO price. Its market capital value is at 35 billion yuan ($4.8 billion). 

The IPO follows the completion of 1.353 billion yuan ($193 million) in a strategic investment earlier this month from Daimler AG, China Insurance Investment Fund, Huatai Securities’ investment arm, Zhejiang Hanrui Holdings, and Jiangsu Soho Holdings.

Farasis aims to allocate the IPO proceeds to spruce up battery capacity and to meet working capital needs.

Chinese Huatai United Securities served as the lead principal underwriter, while CITIC Securities and Soochow Securities were the joint sponsors for the deal. 

Farasis, a designer and manufacturer of lithium-ion batteries, has three R&D centres in Ganzhou,  Silicon Valley and Stuttgart in Germany. 

The company’s top clients include BAIC Group, Zero Motorcycles, Daimler AG, China FAW Group Corporation, Volta Power Systems and Zhejiang Yusong Technology.

The company’s prospectus shows that annual revenues stood at 2.4 billion yuan ($350 million) in 2019, 2.28 billion yuan ($325 million) in 2018 and 1.3 billion yuan ($191 million) in 2017. As of 2019, it clocked 131 million yuan ($18.7 million) in net profit. 

Farasis Energy (Hong Kong) is the largest shareholder with a 22.68 per cent stake. Daimler’s China investment unit owns 3 per cent equity while V Fund, through its Wuxi subsidiary, retains 1.7852 per cent.

V Fund had teamed up with a portfolio of state-owned investors such as Cas Investment, BOCCOM International and China Reform Fund to collectively pour 5 billion yuan ($714 million) in its Series C round in 2018. Subsequently, in 2019, V Fund had also participated in its Series D round. 

The company’s backers also include Industrial Bank, BAIC Capital, Golden Sunflower Capital, Reiter Capital, Benefit Capital, Zhejiang Heico Holding Group, among others. 

According to Reuters, China’s car sales plunged about 79 per cent in February during the Covid-19 pandemic.