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Tuesday, March 09, 2021, 14:00
Mainland EV trio eye HK listings to raise combined US$5b
By Reuters
Tuesday, March 09, 2021, 14:00 By Reuters

New energy vehicle start-up Li Auto showcases an SUV at the 2020 World Intelligent Connected Vehicles Conference, held from Nov 11-13 in Beijing. (ZHANG DANDAN / CHINA DAILY)

HONG KONG/BEIJING - US-listed Chinese mainland electric vehicle (EV) makers Li Auto Inc, Nio Inc and Xpeng Inc plan to list in the Hong Kong Special Administrative Region as soon as this year, to tap an investor base closer to home, said three people with direct knowledge of the matter.

The trio each aim to sell at least 5 percent of their enlarged share capital in the Asian financial hub, the people said. Based on their New York market capitalization on Monday, proceeds could total around US$5 billion.

The trio each aim to sell at least 5 percent of their enlarged share capital in the Asian financial hub, the people said. Based on their New York market capitalization on Monday, proceeds could total around US$5 billion

The EV makers have been working with advisors on the sales which could begin as early as mid-year, one of the people said. The three are looking to take advantage of growing demand from prospective investors in Asia, said another of the people, who declined to be identified due to confidentiality constraints.

Li Auto, Nio and Xpeng declined to comment.

ALSO READ: Domestic industry taking big green strides

The plans come as the trio increase capital raising efforts to fund technology development and expand sales networks, to better compete in the world’s biggest EV market where US peer Tesla Inc is boosting sales of its mainland-made vehicles.

Auto executives have marked 2021 as a crucial year for EV makers to seize market share as the industry expects mainland sales of new-energy vehicles (NEVs) to jump almost 40 percent from last year to 1.8 million units.

Selling shares in the HKSAR would also add the trio to a slew of New York-listed mainland firms seeking a presence on more local exchanges against a backdrop of political tension between the United States and the mainland.

Track Record

Under HKSAR rules, an issuer seeking a secondary listing must have had at least two financial years of good regulatory compliance on another qualifying exchange.

Li Auto and Xpeng went public in the United States in the middle of last year so will likely apply in the HKSAR for a dual primary listing, said two of the people as well as a separate person with direct knowledge of the matter.

ALSO READ: Popular Chinese NEVs slide in value as share prices tumble

As per HKSAR’s dual primary listing rules, firms are subject to full bourse requirements in the HKSAR and a second exchange, but are not bound by the two-year rule.

Xpeng is also considering a third listing on Shanghai’s STAR Market for new-economy firms, said two other people.

“In the long run, it’s helpful for consumer-focused companies like us to connect with domestic capital markets and domestic investors,” Xpeng President Brian Gu told Reuters last week when asked about local listing plans.

“This is the direction we should pay attention to,” he said, declining to comment on any HKSAR listing plan.

Going Green

The mainland has heavily promoted NEVs - such as battery-powered, plug-in petrol-electric hybrid and hydrogen fuel cell cars - to help reduce chronic air pollution, spurring interest from technology companies and investors alike.

Last month, Reuters reported telecommunications firm Huawei Technologies Co Ltd plans to market EVs as early as this year.

READ MORE: Report: China's NEV market to boom in next five years

The mainland forecasts NEVs will make up 20 percent of the country’s annual auto sales by 2025 from around 5 percent in 2020.

Domestic vehicle deliveries last year totalled 32,624 by Li Auto, 43,728 by Nio and 27,041 by Xpeng. That compared with 147,445 vehicles by Tesla, industry data showed.


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