Some shareholders of China’s DJI are working to offload stakes at a discounted enterprise valuation (EV) of circa USD 20bn, three sources familiar with the situation said.

The Shenzhen-based company is currently valued at around USD 22bn, which implies a nearly 10% discount for the secondary stake sale, the sources said. Some undisclosed shareholders are selling now as the drone heavyweight’s Hong Kong IPO prospects have dimmed, two of the sources said.

A combined stake of around 4%-5% has been offered for sale, the two sources said, with one of them suggesting the deal size would be more than USD 800m.

The secondary stake sale has attracted strong interest from Chinese state‑owned enterprises, a third source said.

DJI has no immediate IPO plan but has yet to rule out the possibility of spinning out a subsidiary for an IPO, the first source said. The company is not pursuing the IPO plan amid concerns of technology leakage, the third source said.

Last year DJI hired an undisclosed IPO sponsor to explore a Hong Kong listing with its red-chip structure entity, according to the second source. However, earlier this year Beijing reportedly tightened the regulatory scrutiny on red-chip firms seeking overseas listings.

A red-chip structure was earlier set to enable mainland China-based businesses to list overseas through an offshore-incorporated holding company.

HongShan Capital Group, New Horizon Capital, Maison Capital, and Accel Partners are among DJI’s minority shareholders, according to the company’s marketing material seen by this news service.

Founded in 2006, DJI engages in design and production of commercial drones, which are widely applied for recreation, filmmaking, agriculture, conservation, search and rescue, and energy infrastructure, according to its website. It sells products in more than 100 countries and regions, and has offices in the US, Germany, the Netherlands, Japan, South Korea, as well as in Beijing, Shanghai, and Hong Kong.

DJI did not return requests to comment by press time.

by Wong Ka-chun, Fei’er Wang and Eva Ng

[Editor’s note: The summary of the article has been amended to clarify that the stake sale is based on a discounted EV of around USD 20bn.]