Hengtong Submarine Power Cable, a wholly-owned subsidiary of Shanghai-listed Hengtong Optic-Electric — China’s largest power and fiber optic cable maker, has recently pocketed 1.03 billion yuan ($145.4 million) in a strategic funding round at a pre-money valuation of 17.5 billion yuan ($2.5 billion).
The round roped in four strategic investors including CCB Investment, the investment arm of China Construction Bank; the asset management arm of Bank of China; Hainan Zhongying Equity Investment Fund; and Changshu Jingkai Guofa Fund, a fund set up by state-owned Changshu Guofa Venture, according to a regulatory filing on March 30.
The fresh funding was part of the round that roped in Guokai Manufacturing Transformation and Upgrading Fund — a 50.1-billion-yuan ($7 billion) state-owned fund that aims to promote manufacturing industry development — which injected 1 billion yuan ($141.4 million) in December 2023, the filing noted.
The proceeds, which push the firm’s post-money valuation to 18.5 billion yuan ($2.6 billion) , will help with the daily operations of the firm as well as in paying back bank loans.
As the submarine power cable unit of Hengtong Optic-Electric, the Changshu-headquartered firm engages in the development of submarine communication cables. Currently, there are a number of industry and institutional investors interested in joining the round. However, the total investment proceeds for the round will not exceed 3 billion yuan ($423.5 million).
Submarine cables have emerged to be another battleground for US-China rivalry. HMN Technologies, which is reportedly majority-owned by Hengtong Optic-Electric, was involved in a $500-million undersea fibre optic Internet cable network project that could connect Asia, the Middle East, and Europe, Reuters reported in April 2023.
The report comes at a time when the US government has blocked a number of Chinese subsea cable projects in recent years out of concern that Beijing could eavesdrop on Internet data, per the report.
