US-listed Chinese electric car companies Ideal, Nio and Xiaopeng plan to raise a combined $5bn in Hong Kong listings as early as this year, according to three people familiar with the matter.
All three companies aim to sell at least 5 per cent of their enlarged share capital in Hong Kong, according to people familiar with the situation. Based on the companies’ market capitalizations in New York on Monday, the total proceeds from the sale could be about $5 billion.
The three companies are looking to tap growing demand from potential investors in Asia to raise more capital, according to people familiar with the matter. They have been working with advisers and plan to begin selling shares as early as the middle of this year. Ideal, Nio and Xiaopeng declined to comment.
The consideration of a secondary listing in Hong Kong comes as the three companies step up their fund-raising efforts to fund technology development and expand sales networks to better compete with Tesla in China, the world’s largest market for electric vehicles.
Auto executives see 2021 as a key year for electric car makers to gain market share, as they expect sales of new energy vehicles (NEVs) in China to jump nearly 40 per cent from last year to 1.8m units.
Issuing new shares in Hong Kong against a backdrop of international trade tensions would add Ideal, Nio and Xiaopeng to a long list of New York-listed Chinese companies seeking to list on more local exchanges.
Under Hong Kong rules, companies seeking a secondary listing must have a good regulatory compliance record for at least two fiscal years on other eligible exchanges. Ideal and Xiaopeng both listed in the US in the middle of last year and are likely to apply for dual listing status in Hong Kong, according to people familiar with the matter.
Hong Kong’s dual-listing rules stipulate that companies in Hong Kong and on the second exchange must comply with all exchange requirements, but are not subject to the two-year rule. Xiaopeng is also considering a third listing on the Shanghai science and technology innovation board, according to people familiar with the matter.
“In the long run, it is helpful for a consumer-focused company like ours to build links with the domestic capital market and domestic investors,” Gu Hongdi, president of Xiaopeng, said last week when asked about plans for a local listing. That’s what we should be focusing on.” But he declined to comment on any plans for a Hong Kong listing.
The Chinese government has aggressively promoted new energy vehicles, such as battery-powered cars, plug-in gasoline-electric hybrids and hydrogen fuel cell vehicles, to help reduce air pollution, sparking interest from technology companies and investors. Last month, media reports said Huawei also planned to sell electric cars as early as this year.
China expects new energy vehicles to account for 20 percent of the country’s annual vehicle sales by 2025, compared with about 5 percent in 2020. Last year, Ideal delivered a total of 32,624 domestic vehicles, compared with 43,728 for Nio and 27,041 for Xiaopeng. By comparison, Tesla sold 147,445 vehicles in China, according to industry data.
Reprint indicated source：Shine Trader Limited Live information