HONG KONG / BEIJING (Reuters) – Chinese US-listed electric vehicle (EV) manufacturers Li Auto Inc, Nio Inc and Xpeng Inc plan to list in Hong Kong as soon as this year, taking advantage of a growing investor base. closer to home, people said. with direct knowledge of the subject.
The trio aims to sell at least 5% of the expanded share capital in Central Asia, the people said. Based on its New York market capitalization on Monday, earnings could reach $ 5 billion.
The companies have been working with consultants on sales that could start in the middle of the year, said one of the people, who declined to be identified due to confidentiality restrictions.
Li Auto, Nio and Xpeng, who have raised $ 14.7 billion in US markets since 2018, declined to comment. Shares of the three US-listed automakers rose between 3.7% and 5.3% in the first deals.
The plans emerge as the trio ramps up capital-raising efforts to fund technology development and expand sales networks, to better compete in the world’s largest electric vehicle market, where US company Tesla Inc is driving sales of its China-made vehicles.
This year will be crucial for EV makers to seize market share as the industry expects new energy vehicle (NEV) sales in China to rise nearly 40% from last year to 1, 8 million units.
“Despite much richer financial resources now compared to a year ago, electric vehicle startups still need to invest heavily in next-generation technology,” said Haitong International analyst Shi Ji. “Exploring a secondary list much closer to your local market, if there is one, is a good decision.”
The Hong Kong share sale would also add to the trio a number of New York-listed Chinese firms seeking a presence on more local exchanges amid Sino-US political tension.
The increasing number of such listings “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, chief investment officer of Hong Kong. Beijing Yunyi Asset.
Under Hong Kong rules, a secondary listing requires at least two financial years of good regulatory compliance on another qualified exchange.
Li Auto and Xpeng went public in the United States in the middle of last year, so they will likely apply in Hong Kong for a dual primary listing, said three people with direct knowledge of the matter.
According to Hong Kong’s dual primary listing rules, companies are subject to full Hong Kong exchange requirements and a second exchange, but are not subject to the two-year condition.
Xpeng is also considering a third listing on the Shanghai STAR market for new economy companies, two other people said.
“In the long term, it is helpful for consumer-focused companies like us to connect with national capital markets and national investors,” Xpeng chairman Brian Gu told Reuters last week, declining to comment on any Hong Kong listing plan.
“This is the direction we must pay attention to.”
The Chinese government has heavily promoted NEVs, such as battery-powered hybrid gasoline-electric cars and hydrogen fuel cell cars, in response to chronic air pollution, sparking interest from businesses. technology and investors alike.
Last month, Reuters reported that telecommunications firm Huawei Technologies Co Ltd plans to market electric vehicles starting this year.
China forecasts that NEVs will account for 20% of its annual car sales by 2025 from around 5% in 2020.
Domestic vehicle deliveries last year totaled 32,624 by Li Auto, 43,728 by Nio and 27,041 by Xpeng. That compared to 147,445 Tesla vehicles, industry data showed.
Reporting by Julie Zhu and Scott Murdoch in Hong Kong, Yilei Sun in Beijing; Editing by Sumeet Chatterjee and Christopher Cushing