With Indian production base taking shape, is BIEL Crystal headed for an IPO?

A strong trading debut for one of its peers in Hong Kong’s strongest IPO market in years could prompt the iPhone glass supplier to revive its previous listing plan

Key Takeaways:

• BIEL Crystal is building a new production base in India and expanding further in Vietnam to diversify its manufacturing outside China in response to customer demand
• The maker of glass used in smartphones and tablet PCs could potentially revive its earlier plan to list in Hong Kong

By Doug Young

The year 2025 could be shaping up as Hong Kong’s “Year of the Crystal,” as the city’s stock exchange experiences one of its best IPO markets in the last decade.

Just days after a leading high-tech glass maker raised HK$4.8 billion ($611 million) in its Hong Kong listing, word is circulating that rival BIEL Crystal could be gearing up for its own IPO that could raise even more. That’s because BIEL’s Hong Kong listing would be its first, unlike Lens Technology (300433.SZ; 6613.HK), whose Hong Kong listing this week complemented its existing listing in Shenzhen.

BIEL has yet to comment on any of the market talk, though it has previously attempted to list in Hong Kong before, most recently in 2022. The company ultimately never made it to market, but reports at the time said it was looking to raise up to $2 billion, or more than three times what Lens raised.

The crown jewel in BIEL’s cap is its relationship as a key supplier for Apple’s iPhone, though its client roster also includes other major smart device makers like Samsung, Honor and Xiaomi. The iPhone relationship is reportedly taking BIEL to India, where Apple is manufacturing more of its smartphones lately in a bid to diversify away from its overreliance on China.

The U.S. tech giant currently makes about 20% of its iPhones in India using contract manufacturers Foxconn and Tata Electronics, and is aiming to raise that to about one-third over the next two years, according to media reports. As it raises that volume, it’s encouraging its suppliers to set up local production bases in India as well.

Headquartered in Hong Kong, BIEL currently has eight production bases worldwide with total investment of HK$40 billion, according to its website. Those include facilities in China and Vietnam, with overall annual capacity of 1.85 billion pieces and a total company workforce totaling more than 70,000 people.

But the company looks set to add India as a major production base, according to media reports last year. News of the investment first emerged in January last year when local automotive parts company Samvardhana Motherson International Ltd. said that BIEL was set to invest in its Motherson Electronic Components Pvt Ltd.

A report in India’s Business Standard last August indicated Motherson Electronic Components would be a joint venture between the two companies with investment of about 25 billion rupees ($290 million). It said BIEL could ultimately hold up to 49% of the venture, with Motherson International holding the remainder. In April this year, additional reports indicated that BIEL had completed an initial investment in Motherson Electronic Components.

The reports last year said the venture, which will make glass and other components, could be located in the state of Tamil Nadu, where Corning (GLW.US), another Apple glass supplier, is also building a facility that’s set to start production at the end of this year. The Motherson venture is expected to generate about $1 billion in revenue within its first four to five years, according to the Business Standard report.

Equally important, BIEL could become a trusted and strategic partner with international capabilities that could help it find new opportunities overseas with the Motherson venture offering more choices for customers.

By comparison, Lens does most of its manufacturing in China, but is also diversifying with factories in Vietnam and Mexico. BIEL’s move into India could give it an edge over Lens, since such a facility could more easily serve Apple and a growing number of other customers diversifying their production to India.

Cellphone old-timer

BIEL is an old-timer on China’s tech scene, set up more than three decades ago in Shenzhen, an early testbed for market reforms in China that has produced some of country’s biggest tech names, including WeChat operator Tencent and DJI, the world’s largest drone maker. It started out making watch glass cover plates.

The company’s founders, husband and wife Yeung Kin-man and Lam Wai-ying, started developing the company’s glass cellphone screens in the early 2000s as a more scratch-proof alternative to the plastic that was commonly used at that time, according to a report in Forbes.

BIEL got its first big break in the cellphone space when then-giant Motorola selected the company’s glass for use in its popular RAZR series. In addition to cellphones, the company’s glass is also used in other products like wearables, tablets, augmented reality and virtual reality glasses and vehicles.

BIEL isn’t publicly traded, meaning publicly available financial information about the company is limited. But we can get some clues about its size and profitability from its earlier preliminary prospectus filed in 2021. According to that document, the company reported revenue of about HK$30 billion for its fiscal year through March 2021.

By comparison, Lens Technology was roughly two-thirds larger when it reported 46.7 billion yuan ($6.5 billion) in revenue in 2022, according to the prospectus for its Hong Kong IPO. Here, we should note that Lens operates a more complete device assembly business with relatively lower margins, meaning BIEL’s higher margins could help it get a premium valuation compared to its rival.

An IPO by BIEL would come as Hong Kong experiences its best IPO market since 2021 and its second best in a decade. After three years of weakness, the market roared back to life this year to become the world’s largest by hosting 44 new listings that raised $13.6 billion. Leading that list was another big Chinese tech name, electric vehicle (EV) battery maker CATL, which raised $4.5 billion in May.

Like CATL, Lens Technology is among a subgroup of new Hong Kong IPOs that were previously listed on China’s domestic A-share markets in Shanghai and Shenzhen, but chose to make second listings in Hong Kong to raise their global profiles and attract international investors. BIEL’s Yeung has said in previous interviews that an IPO would help to raise capital to finance the company’s operations, but, more importantly, an IPO would be an important step to raise its global profile.

The Bamboo Works offers a wide-ranging mix of coverage on U.S.- and Hong Kong-listed Chinese companies, including some sponsored content. For additional queries, including questions on individual articles, please contact us by clicking here

To subscribe to Bamboo Works free weekly newsletter, click here