(Yicai Global) May 12 -- Shares of BYD surged after the Chinese electric carmaker said it intends to spin out BYD Semiconductor to list the chip manufacturing arm on Shenzhen's startup board, the ChiNext, while promoting its development.

BYD's Hong Kong-listed equity [HKG: 1211] jumped by as much as 7.6 percent to HKD152.80 (USD19.70) intraday. Its Shenzhen-listed shares [SHE:002594] soared by 5.7 percent to CNY155 (USD24.10).

The spin-off will help BYD break the domestic bottleneck of chips used by downstream companies while driving the country's automotive semiconductor market to develop in an independent and safe way, the Shenzhen-based parent said in a statement yesterday, without revealing any financial details of the initial public offering.

After the tech firm's listing, it will continue researching, producing, and selling power semiconductors, intelligent control, smart sensors, and optoelectronic semiconductors.

BYD Semiconductor’s net profit reached CNY32 million (USD5 million) last year, making up almost 0.8 percent of the parent's total. Its net assets tallied CNY3.2 billion (USD496.4 million), or almost 4.1 percent of BYD's total.

The semiconductor maker has completed two rounds of financing before. During the most latest one in June 2020, the company secured CNY800 million (USD124.5 million) from investors, including SK Group, Xiaomi, SMIC, ARM, and Huaqiang, lifting its valuation to CNY10.2 billion (USD1.6 billion).

Currently, BYD holds 72.3 percent of BYD Semiconductor's equity. After the unit is spun off, it will remain the largest shareholder.

Editor: Emmi Laine, Xiao Yi