Chinese EV Trio plan for HK listings in 2021 to raise combined $5 billion | FI SENSE

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According to Hong Kong/Beijing (Reuters), the US listed Chinese Electric Vehicle (EV) firms are planning to list themselves in the Hong Kong in 2021 in order to expand a growing investor base closer to home. The EV makers, Li Auto Inc, Nio Inc and Xpeng Inc aim to sell at least 5% of enlarged share capital in the Asian hub. As per their New York market capitalization on Monday 08/03/21, the proceeds could accumulate to $5billion.

‘’ Li Auto, Nio and Xpeng – which have raised $14.7 billion in U.S. markets since 2018 – declined to comment. U.S.-listed shares of the three automakers rose between 3.7% and 5.3% in early deals. The companies have been working with advisors on the sales which could begin as early as mid-year, said one of the people, who declined to be identified due to confidentiality constraints” – as reported by Yahoo Finance.

To expand their sales networks, the trio have decided to increase capital  by raising maximum fund technology development to excel in the world’s biggest EV market, where U.S peer Tesla Inc is increasing sales of the vehicles made in China.

2021 seems to be a very crucial year for the EV markets to seize market share. This is because the industry is expecting sales related to new-energy vehicles (NEVs) from China to escalate almost 40% from last year, reaching nearly 1.8 million units.

“Despite much richer financial resources now compared with a year ago, EV start-ups still need to invest heavily in next-generation technology,” said analyst Shi Ji at Haitong International. “Exploring a secondary listing much closer to their home market, if any, is a good move” – as reported by Yahoo Finance.

Zhang Zihua, THE CHIEF INVESTMENT OFFICER AT Beijing Yunyi Asset says that “The rising number of such listings “has enhanced the status of Hong Kong’s capital markets globally, and also helped issuers reach higher valuations and raise more capital”.

GOING GREEN

The Chinese government extremely encourage NEVs such as battery-powered, plug-electric hybrid and hydrogen fuel cell cars – in response to severe air pollution, spurring interest from technology companies and investors alike.

According to Reuters reported last month, telecommunications firm Huawei Technologies Co Ltd plans to sell EVs as early as 2021. As per the forecasts made by China, NEVs are to make 20% of its annual auto sales by 2025 from around 5% in 2020.

In terms of figures, domestic vehicles deliveries by Li Auto, Nio and Xpeng amounted to 32 624, 43 728, and 27 041 respectively.  Tesla had a figure of 147 445 vehicles delivered as reported by industry data.

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