Chinese photovoltaic equipment maker Sungrow Power Supply plans to start the preparatory work to spin off its new energy business for listing in the Chinese mainland.

The intended spin-off of Sungrow New Energy aims to broaden the unit’s financing channels and optimize its asset-liability structure, the Hefei, Anhui province-based parent company announced late on Dec. 8.

Sungrow New Energy mainly provides system research and development and project development services for new energy power stations to global customers. Its assets and liabilities totaled CNY30.3 billion and CNY24 billion (USD4.3 billion and USD3.4 billion), respectively, as of Sept. 30, bringing its asset-liability ratio to 79 percent.

The spin-off and listing of Sungrow New Energy will not result in the loss of Sungrow Power Supply’s control over its unit and will not have a substantial impact on the parent company’s other business segments, Sungrow Power Supply added.

Sungrow Power Supply announced on Dec. 6 that it would invest an additional CNY1 billion (USD140 million) in Sungrow New Energy in the form of capital increase. Given the unit’s valuation of CNY18 billion, Sungrow Power Supply’s stake in Sungrow New Energy will increase to 83 percent from 82 percent after the transaction is completed.

Sungrow Power Supply has been China’s largest energy storage firm by shipments for seven consecutive years. The company achieved a net profit of CNY7.2 billion in the first three quarters of the year, up 250 percent from a year earlier. Sunshine New Energy achieved a net profit of CNY703 million (USD98.6 million) in the period.

Sungrow Power Supply [SHE: 300274] closed 0.7 percent up at CNY79.60 (USD11.16) in Shenzhen today, achieving a total market capitalization of CNY118.2 billion (USD16.6 billion).