Roughly two weeks after a Reuters report broke out speculation regarding Hong Kong IPO plans of the Chinese EV trio NIO Limited (NYSE: NIO), XPeng Inc. (NYSE: XPEV) and Li Auto Inc. (NASDAQ: LI), more details have emerged.
What Happened: Nio is availing the services of Credit Suisse and Morgan Stanley for assisting with its Hong Kong listing, an IFR report said, citing people familiar with the matter.
Nio is reportedly looking to offload a 5% stake, valued at around $3.4 billion, in a secondary listing.
The valuation is calculated based on Friday’s closing price of Nio’s ADS listed on the NYSE.
The report further said Xpeng has hired Bank of America and JPMorgan and Li Auto is working with Goldman Sachs and UBS, for their respective Hong Kong listings.
Spokespersons of Xpeng and Nio declined to comment on the report, when contacted by Benzinga.
Related Link: Is The Nio Sell-Off Overdone?
Since Xpeng and Li Auto do not satisfy the norm of having a good track record of a minimum of two financial years of regulatory compliance with the standards of another qualifying exchange, these two companies may not be eligible for secondary listings, the IFR report said.
Instead, these companies may have to take the route of dual primary listing that will be allowed with additional disclosures, according to the report.
Xpeng ADSs were listed on the NYSE on Aug. 27 and Li Auto began trading on the Nasdaq on July 30.
Why It’s Important: Demand from investors in Asia has been on the rise, as evidenced by the homecoming of several U.S.-listed Chinese companies.
For companies such as Nio, Xpeng and Li Auto, which operate in a cash-intensive industry, any leeway to raise further cash without the accompanying financial burden is a welcome outcome.
Apart from adding to their product lineup, these companies are investing heavily in technology and service offerings.
After a volatile run in much of February, Nio, Xpeng and Li Auto are all trading notably off their highs.
Nio settled Friday’s session up 4.13% to $43.35, Xpeng rallied 7.09% to $37.48 and Li Auto added 4.87% to $26.28.
Related Link: A New Rival To Tesla And Nio? This Lesser-Known Chinese EV Stock Has Surged 924% In A Year
Photo: Courtesy of Nio
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