Tesla’s rival Xpeng prices Hong Kong IPO at HK$165 per share as electric carmaker kicks off second primary listing
- Xpeng’s offer price represents a 4.1 per cent discount to its US close on Tuesday
- Xpeng’s shares will start trading from July 7 under the stock code ‘9868’
The price represents a discount of about 4.1 per cent to its closing price of US$44.32 on Tuesday on the New York Stock Exchange. It is also 8.3 per cent below the maximum price of HK$180 set for the retail tranche.
This is the guidance price and it will be finalised at a meeting later on Wednesday, sources familiar with the matter said.
Xpeng declined to comment.
Chinese XPeng electric car can drive and park by itself
Shares that are listed in Hong Kong and the US are fungible, which means investors can buy and sell the shares on either exchange and their prices are unlikely to diverge too much.
Pharmaceutical company BeiGene was the first company from the mainland company to be dual-listed in the US and Hong Kong. It raised US$182.2 million in New York in 2016, before selling HK$7.08 billion worth of shares in Hong Kong in 2018.
A dual-primary listing will enable these companies to be eligible for inclusion in Hong Kong exchange’s Stock Connect, which enables mainland Chinese investors to trade stocks listed in Hong Kong and vice versa. Such inclusion could help bolster these tech company’s investor base and trading volume.
China is the world’s largest car market, with 93 per cent of the 19.7 million passenger vehicles sold in 2020 powered by the traditional internal combustion engines, pointing to large room for growth for electric cars. Beijing wants home-grown carmakers to command 80 per cent of China’s electric vehicle market by 2025, according to the government’s “Made in China 2025” industrial master plan.
A Hong Kong listing will ensure that the still-unprofitable Xpeng’s is well funded to expand its share in a market which saw vehicle orders for Palo Alto, California-based Tesla EVs falling in May. For the three months ended March Xpeng’s net loss totalled 786.6 million yuan (US$120.1 million), widening from 629.8 million yuan a year earlier.
A total of nine IPOs are marketing for investors’ money this week, compared to just one deal during the last week of May, according to data compiled from the exchange and brokerages.
The company plans to use the net proceeds on expanding its product portfolio, and developing software and hardware technology, it said in its prospectus.
JPMorgan and Bank of America are joint sponsors and joint bookrunners for the deal, with Citi and Citic Securities also joining in as bookrunners.