Phonemaker eyes IPO at 15b yuan valuation

DreamSmart Group, the smartphone maker backed by Geely Automobile (0175), has selected banks to prepare for its Hong Kong initial public offering that may value it at more than 15 billion yuan (HK$16.31 billion).

The startup behind the popular smartphone brand Meizu is working with China International Capital Corp (3908) and Huatai Securities (6886) on the potential sale this year, the people said.

The company, owned by Chinese automaker Geely, may seek a valuation of up to 20 billion yuan in the offering, depending on market conditions, according to people familiar with the matter.

Founded two decades ago as a purveyor of MP3 music players, Meizu was one of the pioneers of China's then-nascent smartphone industry alongside big names such as Xiaomi (1810). Once backed by Alibaba Group (9988), it cranked out trendy devices and an operating system that initially won acclaim but later ceded ground to more aggressive rivals such as Oppo and Huawei Technologies. Billionaire Li Shufu's auto company acquired the brand in 2022, which began developing AI around the time ChatGPT took the concept mainstream.

It comes as Li Auto (2015) and BYD (1211) continue the price cuts. Li Auto lowered the prices of two models by 18,000 yuan to as low as 301,800 yuan, while BYD slashed the starting price of a new version of the e2 EV hatchback by 12.7 percent to 89,800 yuan per unit.

The intensified price war didn't hurt their share prices, with Li Auto rising by 3.2 percent and BYD losing less than 0.1 percent.

Meanwhile, global sales of fully electric and plug-in hybrid vehicles rose at a tepid rate of 3 percent in February versus the same period last year mainly due to the impact of the Chinese Lunar New Year celebrations, market research firm Rho Motion said on Wednesday.

The company said global sales hit 800,000 units. Sales in Europe grew 12 percent versus February of last year and rose 31 percent in the US and Canada, while they fell 12 percent in China.

Rho Motion expects global electric car sales to rise between 25 percent and 30 percent this year.

Separately, Toyota Motor agreed to give factory workers their biggest pay increase in 25 years on Wednesday, as much as 28,440 yen (HK$1,503), heightening expectations that bumper pay raises will give the central bank leeway to make a key policy shift next week.