HONG KONG / BEIJING (Reuters) – Chinese electric vehicle (EV) manufacturers, listed in the United States, Li Auto Inc., Nio Inc. and Xpeng Inc. plan to make a list in Hong Kong as early as this year, taking advantage of a ‘investors increasingly closer to home, according to people with direct knowledge of the subject.
The trio aims to sell at least 5% of the expanded share capital in Central Asia, people said. According to New York’s stock market capitalization on Monday, revenue could reach $ 5 billion.
Companies have been working with advisors on sales that could begin as early as mid-year, said one of the people, who declined to identify himself due to confidentiality restrictions.
Li Auto, Nio and Xpeng, which have raised $ 14.7 billion in U.S. markets since 2018, declined to comment. US-listed shares of the three automakers rose between 3.7% and 5.3% in the first operations.
Plans are presented as the trio increases capital raising efforts to fund technology development and expand sales networks, to better compete in the world’s largest electric vehicle market, where Tesla Inc., an American partner, increases sales of its vehicles manufactured in China.
This year will be crucial for electric vehicle manufacturers to gain market share, as the industry expects new energy vehicle (NEV) sales in China to jump nearly 40% from last year to 1, 8 million units.
“Despite much richer financial resources than a year ago, emerging EV companies still have to invest heavily in next-generation technology,” analyst Shi Ji told Haitong International. “Exploring a secondary listing much closer to your home market, if any, is a good step.”
The sale of shares in Hong Kong would also add to the trio of a number of Chinese companies listed in New York wanting to have a presence in more local exchanges amid Sino-US political tension.
The growing number of such quotations “has improved the state of Hong Kong’s capital markets globally and has also helped issuers achieve higher valuations and raise more capital,” said Zhang Zihua, director of investments at Hong Kong. Beijing Yunyi Asset.
SONG HISTORY
According to Hong Kong rules, a secondary listing requires at least two financial years of good regulatory compliance on another qualified exchange.
Li Auto and Xpeng were made public in the United States in the middle of last year, so they will likely apply to Hong Kong for a dual primary listing, according to three people with direct knowledge of the matter.
Under Hong Kong’s main double-list rules, companies are subject to full stock exchange requirements in Hong Kong and a second change, but are not required by the two-year condition.
Xpeng is also considering a third listing on the Shanghai STAR market for new economy companies, two more people said.
“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. refuse to comment on any Hong Kong listing plan.
“That’s the direction we need to pay attention.”
ENVERGENT
The Chinese government has largely promoted NEVs, such as battery-powered cars, electric hybrids and electric gasoline and hydrogen fuel cells, in response to chronic air pollution, encouraging the interest of technology companies and investors.
Last month, Reuters reported that telecommunications company Huawei Technologies Co. Ltd. plans to market electric vehicles as early as this year.
China expects NEVs to account for 20% of its annual car sales in 2025, up from about 5% in 2020.
The delivery of domestic vehicles last year was 32,624 for Li Auto, 43,728 for Nio and 27,041 for Xpeng. This compares to 147,445 Tesla vehicles, according to industry data.
Reports by Julie Zhu and Scott Murdoch in Hong Kong, Yilei Sun in Beijing; Edited by Sumeet Chatterjee and Christopher Cushing