A Nio Eve car.
Hector Retamal/AFP via Getty Images
Chinese electric vehicle maker NIO plans another listing outside of the U.S., a move that pushed shares on the New York Stock Exchange markedly higher Monday.
In late-morning trading, NIO (ticker: NIO) American depositary shares were up 9.1%. The S&P 500 and Dow Jones Industrial Average were down 0.1% and 0.5%, respectively.
NIO is seeking a secondary listing on the Hong Kong Exchange, with the aim of trading to start around March 10 under the symbol 9866.
“Upon listing on the Main Board of the [exchange], the shares listed on the Main Board of the [Hong Kong Exchange] will be fully fungible with the ADSs listed on the NYSE,” the company said in a statement Sunday.
A secondary listing is good for investors for a couple of reasons. First, a Hong Kong listing gives NIO access to another pool of capital. NIO peers XPeng (XPEV) and Li Auto (LI) both raised cash in the Hong Kong market in 2021.
Second, another listing eliminates the risk of delisting in the U.S., which is growing with a timeline now from Washington that U.S.-listed Chinese firms abide by American auditing standards or be delisted.
A Hong Kong listing would give investors another place to trade NIO shares if the worst were to happen.
“This news, in our view, should largely mitigate the political risks that have concerned the market about NIO in the past 6 months,” wrote Citigroup analyst Jeff Chung in a Monday report.
Chung has a Buy rating; his price target of $87 a share is the highest on Wall Street, according to Bloomberg data.
Despite Monday’s uptick, the stock is still down almost 30% year to date. Rising interest rates, inflation and war in Europe have sapped investor willingness to hold richly valued, high growth stocks like NIO.
Analysts project NIO sales will grow about 75% in 2022—and shares trade for about six times sales. The S&P 500 trades for closer to three times sales.
Write to Al Root at [email protected]
