Chinese smart electric car maker XPeng has reportedly secured approval to list on the Hong Kong Stock Exchange, becoming the latest US-listed Chinese company to list closer to home, in a move expected to raise up to $US2 billion.
A number of reports have appeared this week claiming XPeng had been successful in securing approval to list on the Hong Kong Stock Exchange. According to The Wall Street Journal, the company was aiming to raise as much as $US2 billion from the stock sale, citing “a person familiar with the situation”.
Similarly, CNBC confirmed that Hong Kong Exchanges and Clearing’s listing committee approved XPeng’s listing, citing “a source close to the matter … who was not authorised to speak publicly about the matter.”
Already listed on the New York Stock Exchange and boasting a market value of more than $US30 billion, XPeng currently sells primarily in China, the world’s largest electric vehicle market, where it competes with other brands such as Tesla and Nio.
As The Wall Street Journal posits, if XPeng is able to raise its goal of $US2 billion by listing in Hong Kong, that would mean the company has been able to raise more than $US6 billion from stock investors in less than a year – thanks to its initial $1.7 billion IPO on the New York Stock Exchange last August, and another $US2.5 billion raised in December.
Despite the fact that several Chinese companies listed in the US have also subsequently listed on the Hong Kong Stock Exchange – such as Alibaba and JD.com – XPeng will nevertheless take a different route.
Companies like Alibaba and JD.com have secured secondary listing in Hong Kong partly in an effort to hedge against risks arising from prolonged US and China tensions, which would leave such companies partially stranded if they were reliant solely on listing in the United States.
However, due to its relative short history as a US public company, XPeng was not able to seek a secondary listing in Hong Kong, and instead secured a dual primary listing, meaning that the company would have to comply fully with listing rules in both markets.
Nevertheless, there are still benefits for XPeng in securing a dual primary listing. For example, according to the WSJ’s “person familiar with the situation”, the company’s stock will be eligible for inclusion in Hong Kong’s Stock Connect program, which means investors in mainland China will be able to buy shares through a trading link with Hong Kong immediately after its market debut.
Securing its listing in Hong Kong continues XPeng’s relatively strong performance this year, after it revealed it had delivered 13,340 cars in the first quarter of the year – up more than fivefold over the same quarter a year earlier.
Similarly, the company unveiled in January the beta version of its highway autonomous driving solution, Navigation Guided Pilot (NGP), in a series of media road tests in the Hong Kong port city of Guangzhou.
XPeng’s NGP was then expected to be pushed out to Chinese customers via an over-the-air upgrade, part of the company’s XPILOT 3.0 autonomous driving package.
Joshua S. Hill is a Melbourne-based journalist who has been writing about climate change, clean technology, and electric vehicles for over 15 years. He has been reporting on electric vehicles and clean technologies for Renew Economy and The Driven since 2012. His preferred mode of transport is his feet.