Tuesday, March 09, 2021


GREEN CAPITALI$M
Exclusive: Chinese EV trio eye Hong Kong listings this year to raise combined $5 billion - sources
POST FORDIST CAPITALISM 
WITH CHINESE CHARACTERISTICS 

By Julie Zhu, Scott Murdoch and Yilei Sun 

© Reuters/MIKE SEGAR FILE PHOTO: 
An Xpeng P7 performance electric vehicle is seen outside the New York Stock Exchange

HONG KONG/BEIJING (Reuters) - U.S.-listed Chinese electric vehicle (EV) makers Li Auto Inc, Nio Inc and Xpeng Inc plan to list in Hong Kong 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% of their enlarged share capital in the Asian finiancial hub, the people said. Based on their New York market capitalisation on Monday, proceeds could total around $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.

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 U.S. peer Tesla Inc is boosting sales of its China-made vehicles.

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


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

TRACK RECORD

Under Hong Kong 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 Hong Kong for a dual primary listing, said two of the people as well as a separate person with direct knowledge of the matter.

As per Hong Kong's dual primary listing rules, firms are subject to full bourse requirements in Hong Kong 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 Hong Kong listing plan.

GOING GREEN

China's government 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.

China forecasts NEVs will make up 20% of the country's annual auto sales by 2025 from around 5% 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.

(Reporting by Julie Zhu and Scott Murdoch in Hong Kong, Yilei Sun in Beijing; Editing by Sumeet Chatterjee and Christopher Cushing)

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