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China electric cars: Li Auto gets nod for IPO, dual primary listing in Hong Kong
- Li Auto has won approval from Hong Kong stock exchange to sell shares and list on the main board
- The Nasdaq-listed start-up will become the second Chinese EV maker to list in Hong Kong, after Xpeng’s US$1.8 billion IPO
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Li Auto, the Chinese electric-vehicle maker backed by on-demand delivery service giant Meituan, has got the go-ahead from Hong Kong stock exchange for an initial public offering, just 12 months after its debut in New York.
The EV start-up will join rival Xpeng, which became the first Chinese EV company to list in Hong Kong via a dual primary listing following its US$1.8 billion fundraising this month.
The Beijing-based company plans to list on the main board through a dual primary listing, which means that unlike a secondary listing, it would not benefit from the automatic waivers granted by the Hong Kong bourse that would streamline the application-vetting process. But Li Auto’s primary listing makes it eligible for inclusion in the Stock Connect, potentially opening up its shares to a huge investor base in China.
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Last July, Li Auto raised US$1.1 billion from its Nasdaq IPO, after pricing its American depositary shares (ADS) at US$11.5 each. Issuers seeking a listing in the city after a US flotation generally price their Hong Kong shares close to the ADS level to avoid price volatility, analysts said. Each Li Auto ADS represents two ordinary shares.
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“We have not been profitable since our inception,” Li Auto said in the heavily redacted draft prospectus on Monday. “We may not generate sufficient revenues or continue to incur substantial losses for a number of reasons, including lack of demand for our vehicles and increasing competition.”
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