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Drinda New Energy Powers Up IPO For Overseas Expansion

Key Takeaways:

Drinda fell into the red in the first half of the year, hit by excess capacity in the sector

The company wants to spend its IPO funds on ramping up overseas production and sale

By Fai Pui

China has re-energized its stock markets with a series of stimulus measures, drawing a crowd of IPO candidates that are keen to plug into the action.

One of the latest applicants for a Hong Kong listing is a leading Chinese maker of photovoltaic cells for solar power systems, which is looking to raise funds to expand its business in overseas markets.

Already traded in Shenzhen as Hainan Drinda Automotive Trim Co. Ltd, the company has filed to list in Hong Kong under the name Hainan Drinda New Energy Technology Co. Ltd., reflecting the revised focus of its business.

Drinda first applied to the Hong Kong Stock Exchange in February this year, but the bid lapsed six months later. With mainland and Hong Kong stock markets in a slump at the time, the company was in no immediate hurry to pursue its listing ambitions. After all, its A-share has lost more than half of its value over the past year.

But rallies unleashed by supportive government policies tempted Drinda to make another push for the Hong Kong market, with hopes of a better IPO valuation.

Founded in 2003, the company initially made plastic automotive trims such as dashboards and bumpers. It went public on the Shenzhen Stock Exchange in 2017, but business declined the following year as China’s auto market slowed down.

The company’s strategy shifted towards the photovoltaic (PV) sector from 2019. To acquire expertise in the then-dominant form of solar cells, Drinda bought a 51% stake in Jietai Technology, which specialized in P-type PERC cells, for 1.43 billion yuan ($200 million). The company then pulled out of the auto components business to devote all its resources to PV cells.

Drinda thrived as a leading ...