- Xiaomi plans to invest about $253 million for a 5.34% stake in Sunwoda EVB, becoming its third-largest shareholder.
- Sunwoda will lose control of the subsidiary following the capital increase and a board reshuffle.
Sunwoda (SZSE: 300207) plans to bring in Xiaomi (HKEX: 1810) as an investor in its EV battery business while scrapping its own Hong Kong listing plan. It will lose control of the subsidiary following the capital increase and a board reshuffle.
Xiaomi plans to invest 1.7 billion yuan ($253 million) for a 5.34% stake in Sunwoda Electric Vehicle Battery Co Ltd (Sunwoda EVB), becoming its third-largest shareholder, according to a filing released on Thursday evening.
That same evening, Sunwoda announced it was terminating plans to issue H shares and list on the Hong Kong stock exchange’s main board, citing market conditions, changes within the company and its development plans.
The listing plan received board and shareholder approval in July 2025. Sunwoda said the cancellation would not materially affect its operations or continued development.
Xiaomi plans to make the investment through its wholly owned subsidiary Hanxing Venture Capital Co Ltd. The capital increase agreement has been signed, but the transaction still requires approval from Sunwoda’s shareholders.
Following the capital increase, Sunwoda’s stake in Sunwoda EVB, held through its wholly owned subsidiary Sunwoda Huizhou New Energy Co Ltd, will fall to 22.78% from 24.06%. It will remain the largest shareholder.
Sunwoda EVB will also elect a new board. Once the capital increase and board reshuffle are completed, Sunwoda will hold no more than half of the board seats and will no longer consolidate the unit’s financial statements.
Sunwoda preliminarily estimates that the accounting treatment associated with the deconsolidation will increase its 2026 net profit by 3.2 billion to 4.5 billion yuan. The final impact will be subject to audit.
The accounting treatment includes remeasuring the remaining stake at its fair value on the date control is lost. Sunwoda will subsequently recognize investment income based on its share of Sunwoda EVB’s earnings, rather than consolidate the unit’s full financial statements.
The move will help Sunwoda focus resources on businesses including consumer batteries and energy storage systems, while reducing overall financing needs and its liabilities-to-assets ratio, the company said. The deconsolidation still requires shareholder approval.
The restructuring comes as Sunwoda’s earnings face pressure. Revenue rose 45.78% year-on-year to 63.46 billion yuan in the first 3 quarters of 2026, while net profit attributable to shareholders fell 56.37% to 613 million yuan. Its shares closed down 4% in Shenzhen on October 30.
Sunwoda EVB reported revenue of 15.53 billion yuan and a net loss of 324 million yuan in the first half of 2026. Sunwoda said Xiaomi’s investment would strengthen the unit’s finances and deepen cooperation in research and development, production capacity support and market expansion.
Xiaomi had already established a supply relationship with Sunwoda EVB. The companies announced a strategic partnership on September 4, and the Dragon Armour co-developed by Sunwoda EVB are already used in Xiaomi’s Sky Nomad series.
The planned investment comes less than 2 months after the announcement of a capital injection into Sunwoda EVB by Li Auto (NASDAQ: LI), underscoring the battery supplier’s deepening equity ties with automakers.
Sunwoda disclosed on September 4 that Li Auto planned to invest 2.65 billion yuan for a direct 8.79% stake in Sunwoda EVB. The companies also established a joint venture in 2025, each holding 50%, to manufacture Li Auto’s in-house developed batteries.
Following Xiaomi’s investment, Li Auto’s stake in Sunwoda EVB will fall to 8.32%, maintaining its position as the second-largest shareholder.
Sunwoda said its new system can charge from 10% to 70% in just 5 minutes at room temperature.
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