Evergrande Group Chairman Xu Jiayin attends New Energy Auto Global’s Global Strategic Partners Summit on November 12, 2019 in Guangzhou, Guangdong Province, China.
VCG | Visual China Group | Getty Images
GUANGZHOU, China – Shares of the electric vehicle unit of Chinese real estate giant Evergrande rose to 67% on Monday after the company secured significant financing through a new sale of shares.
China Evergrande New Energy Vehicle Group rose to an all-time high of $ 50 Hong Kong before stopping some of those gains. The company’s shares closed at $ 45.35 Hong Kong.
Shares soared after the Chinese electric vehicle company issued 952.38 million shares to six investors at a price of $ 27.30 Hong Kong dollars and increased net income by $ 26 billion of Hong Kong ($ 3.35 billion).
The funding is another sign that China’s electric vehicle market is heating up and Evergrande could pose a challenge for Tesla and national rivals such as Nio and Xpeng Motors.
Last year, Evergrande showed off six new electric vehicles under the Hengchi brand, hoping to start production this year. The company has not yet sold any cars.
In September, the company raised about $ 4 billion from Hong Kong by selling shares to investors, including Chinese Internet giant Tencent and service Didi.
China Evergrande New Energy Vehicle Group is also preparing for enrollment in the Shanghai Nasdaq-style Science and Technology Innovation Board, or the Star Market.
Chinese electric car companies have been aggressively raising capital to increase production and take the lead in the competitive market.
Xpeng Motors raised $ 1.5 billion in an initial public offering in the United States last year and this month secured a 12.8 billion yuan ($ 1.988 billion) line of credit.
This month, BYD, the Chinese electric vehicle maker backed by US billionaire Warren Buffett, said it raised $ 29.9 billion from Hong Kong by issuing new shares.