Key Takeaways
- • Xiaomi, through wholly owned subsidiary Hanxing Venture Capital, is injecting 1.7 billion yuan (approximately $255.9 million) into Sunwoda Power for a 5.34% stake, making it the third-largest shareholder, according to Sunwoda's announcement on Oct. 29.
- • Sunwoda will lose control of Sunwoda Power, holding no more than half the board seats, and will deconsolidate the unit, which is expected to add 3.2 billion to 4.5 billion yuan (approximately $481.7 million to $677.4 million) to its 2026 net profit through fair-value remeasurement of the retained stake.
- • Sunwoda Power remains loss-making, with first-half 2026 revenue of 15.529 billion yuan and a net loss of 324 million yuan, and a debt-to-asset ratio near 84%.
- • Sunwoda terminated its planned H-share listing on the Hong Kong main board on the same day, and its shares closed down 4% at 16.06 yuan on Oct. 30.
- • Li Auto's stake is diluted from 8.79% to 8.32% following Xiaomi's investment, which comes just over a month after Li Auto paid 2.65 billion yuan for its stake in September.
Summary
Sunwoda (300207.SZ) announced late on Oct. 29 that its controlled subsidiary Sunwoda Power Technology Co. completed a new round of capital expansion, with Xiaomi contributing 1.7 billion yuan to subscribe to 898 million yuan of newly registered capital. Upon completion, Xiaomi holds 5.34% of Sunwoda Power, while Li Auto's stake falls from 8.79% to 8.32%, and the largest shareholder, Sunwoda Huizhou New Energy Co., drops from 24.06% to 22.78%. Sunwoda said the capital increase is intended to deepen strategic cooperation with Xiaomi, which is already a customer; Sunwoda is a core strategic supplier of Xiaomi's Longjia battery and builds custom cells and dedicated lines for its Pengcheng series models.
After the capital increase and a board election, Sunwoda will hold no more than half of Sunwoda Power's board seats and will no longer have control. Sunwoda Power will move from a controlled subsidiary to an associate and will be deconsolidated. Sunwoda said the unit has been a significant drag on net profit attributable to shareholders in recent years, partly due to litigation involving Sunwoda Power in 2025, and that deconsolidation will reduce operating and market volatility risks, focus resources on consumer batteries and energy storage, and lower the debt-to-asset ratio. The remaining equity will be remeasured at fair value, which Sunwoda expects to add 3.2 billion to 4.5 billion yuan to 2026 net profit.
Sunwoda Power's finances remain weak. Full-year 2025 revenue exceeded 20 billion yuan and the net loss was about 3.169 billion yuan. In the first half of 2026, revenue was 15.529 billion yuan and the net loss narrowed to 324 million yuan. At the end of June, total assets were 68.15 billion yuan and total liabilities were 57.24 billion yuan, a debt-to-asset ratio of nearly 84%. Li Auto's ties to Sunwoda are also deep: the two formed a 50-50 joint venture, Shandong Li Auto Battery Co., last year to manufacture Li Auto's in-house-developed batteries.
Sunwoda's parent results also weakened. For the first three quarters of 2026, revenue rose 45.78% year on year to 63.462 billion yuan, but net profit attributable to shareholders fell 56.37% to 613 million yuan. Third-quarter net profit attributable to shareholders was about 10.6 million yuan, down 98.08%. On a conference call, the company attributed the decline to weaker downstream consumer electronics demand, higher materials costs, yuan appreciation, a lower export tax rebate rate and consumption tax. The same day, Sunwoda terminated its plan to issue H shares and list on the Hong Kong main board, citing a comprehensive assessment of market conditions and its own development plans, and said the move would not materially affect daily operations. Sunwoda shares closed down 4% at 16.06 yuan on Oct. 30, valuing the company at about 29.7 billion yuan.
The transactions reflect automakers' push to diversify battery supply. According to the China Automotive Battery Innovation Alliance, CATL held 42.81% of September installations with 32.51 GWh, while Sunwoda ranked sixth with a 3.6% share, down 0.33 percentage point from August. For Xiaomi and Li Auto, the stake provides second-tier battery capacity beyond CATL and some influence over a core supplier. For Sunwoda, deconsolidation may improve its reported income in the short term, but the market's central question is whether Sunwoda Power can use its automaker shareholders to expand capacity and narrow losses.
After the capital increase and a board election, Sunwoda will hold no more than half of Sunwoda Power's board seats and will no longer have control. Sunwoda Power will move from a controlled subsidiary to an associate and will be deconsolidated. Sunwoda said the unit has been a significant drag on net profit attributable to shareholders in recent years, partly due to litigation involving Sunwoda Power in 2025, and that deconsolidation will reduce operating and market volatility risks, focus resources on consumer batteries and energy storage, and lower the debt-to-asset ratio. The remaining equity will be remeasured at fair value, which Sunwoda expects to add 3.2 billion to 4.5 billion yuan to 2026 net profit.
Sunwoda Power's finances remain weak. Full-year 2025 revenue exceeded 20 billion yuan and the net loss was about 3.169 billion yuan. In the first half of 2026, revenue was 15.529 billion yuan and the net loss narrowed to 324 million yuan. At the end of June, total assets were 68.15 billion yuan and total liabilities were 57.24 billion yuan, a debt-to-asset ratio of nearly 84%. Li Auto's ties to Sunwoda are also deep: the two formed a 50-50 joint venture, Shandong Li Auto Battery Co., last year to manufacture Li Auto's in-house-developed batteries.
Sunwoda's parent results also weakened. For the first three quarters of 2026, revenue rose 45.78% year on year to 63.462 billion yuan, but net profit attributable to shareholders fell 56.37% to 613 million yuan. Third-quarter net profit attributable to shareholders was about 10.6 million yuan, down 98.08%. On a conference call, the company attributed the decline to weaker downstream consumer electronics demand, higher materials costs, yuan appreciation, a lower export tax rebate rate and consumption tax. The same day, Sunwoda terminated its plan to issue H shares and list on the Hong Kong main board, citing a comprehensive assessment of market conditions and its own development plans, and said the move would not materially affect daily operations. Sunwoda shares closed down 4% at 16.06 yuan on Oct. 30, valuing the company at about 29.7 billion yuan.
The transactions reflect automakers' push to diversify battery supply. According to the China Automotive Battery Innovation Alliance, CATL held 42.81% of September installations with 32.51 GWh, while Sunwoda ranked sixth with a 3.6% share, down 0.33 percentage point from August. For Xiaomi and Li Auto, the stake provides second-tier battery capacity beyond CATL and some influence over a core supplier. For Sunwoda, deconsolidation may improve its reported income in the short term, but the market's central question is whether Sunwoda Power can use its automaker shareholders to expand capacity and narrow losses.
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