HONG KONG / BEIJING (Reuters) – US-listed Chinese electric vehicle (EV) manufacturers Li Auto Inc, Nio Inc and Xpeng Inc plan to join Hong Kong this year, reaching a growing investor base home, said people with direct knowledge of the problem.
The trio aims to sell at least 5% of the expanded share capital in Central Asia, people said. Based on Monday’s market capitalization in New York, revenues could reach $ 5 billion.
The companies have been working with advisors on sales that could begin as early as the middle of the year, said one person, who declined to be identified due to privacy constraints.
Li Auto, Nio and Xpeng – which have raised $ 14.7 billion in US markets since 2018 – declined to comment. The US-listed shares of the three carmakers rose between 3.7% and 5.3% in early transactions.
The plans come as the trio step up its fundraising efforts to fund technology development and expand sales networks to better compete in the world’s largest electric vehicle market, where fellow American Tesla Inc. is increasing sales of its manufactured vehicles. in China.
This year is going to be crucial for electric vehicle manufacturers to take advantage of the market share, as the industry expects China’s new energy vehicle (NEV) sales to grow by almost 40% from 1.8 million last year. of units.
“Despite much richer financial resources than a year ago, EV start-ups must continue to invest in next-generation technology,” said Haitong International analyst Shi Ji. “Exploring a secondary listing much closer to their internal market, if any, is a good move.”
The sale of shares in Hong Kong would also add to the trio of a number of Chinese companies listed in New York seeking a presence on several local stock exchanges amid Sino-US political tension.
The growing number of such listings “has improved the status of Hong Kong’s capital markets globally and has also helped issuers achieve higher valuations and raise more capital,” said Zhang Zihua, investment director in Beijing. Yunyi Asset.
HISTORIC
According to Hong Kong rules, a secondary list requires at least two financial years for good regulation in line with another eligible scholarship.
Li Auto and Xpeng went public in the United States in the middle of last year, so they will probably apply in Hong Kong for a dual primary list, said three people with direct knowledge about the issue.
Under Hong Kong’s dual primary listing rules, firms are subject to full Hong Kong stock exchange requirements and a second exchange, but are not required by the two-year condition.
Xpeng is also considering a third listing on the Shanghai STAR market for companies in the new economy, two others said.
“In the long run, it is useful for consumer-oriented companies for us to connect with domestic capital markets and domestic investors,” Xpeng President Brian Gu told Reuters last week, refusing to comment on any listing plans in Hong Kong.
“This is the direction we should be paying attention.”
GREEN DEVELOPMENT
The Chinese government has strongly promoted NEV vehicles – such as battery-powered vehicles, electric hybrid cars and hydrogen fuel cells – in response to chronic air pollution, stimulating the interest of technology companies and investors.
Last month, Reuters reported that telecommunications company Huawei Technologies Co Ltd plans to sell electric vehicles as early as this year.
China estimates that NEVs will account for 20% of its annual car sales by 2025, up from about 5% in 2020.
Domestic vehicle deliveries last year totaled 32,624 Li Auto, 43,728 Nio and 27,041 Xpeng. Compared to 147,445 vehicles from Tesla, they showed industry data.
Reporting by Julie Zhu and Scott Murdoch in Hong Kong, Yilei Sun in Beijing; Editing by Sumeet Chatterjee and Christopher Cushing