EV maker Xpeng said to get nod for US$2b HK listing: sources

[HONG KONG] New York-traded electric-vehicle (EV) maker Xpeng has received the green light from the Hong Kong stock exchange to list in the city, according to people with knowledge of the matter, the latest homecoming share sale by a Chinese company.

Xpeng could raise as much as US$2 billion in Hong Kong as soon as this year, the people said, asking not to be identified as the information isn't public. Details could still change as deliberations are ongoing, the people added. A spokesperson for the Chinese carmaker declined to comment.

A listing by Xpeng would end a brief hiatus in such share sales by US-listed Chinese firms with online travel firm Trip.com the last, raising about US$1.25 billion in Hong Kong in April. Many US-traded Chinese companies have flocked to the Asian financial hub since it eased rules in 2018 to allow the likes of Alibaba Group Holding and gaming giant NetEase to list.

A listing in Hong Kong gives stateside-traded Chinese firms a foothold that acts as a hedge against the risk of being kicked off US exchanges, while allowing them to broaden their investor base closer to home. Under a bill passed in the US, Chinese public companies could be kicked off US stock bourses if American regulators aren't allowed to review their audits.

Unlike the other homecoming listings, however, Xpeng's isn't a secondary listing - which would have exempted it from some of the Asian hub's listing rules - but a dual primary one. That is because Xpeng, which only went public in New York last year, doesn't have the two-year listing track record required for it to merit a secondary listing in Hong Kong.

It's set to be the biggest dual primary listing in Hong Kong since biotech drugmaker BeiGene raised US$903 million in the city almost three years ago.

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Xpeng's US presence has already helped the EV maker raise funds. After raising US$1.72 billion in its August IPO in New York it fetched another US$2.5 billion from investors by placing stock in December.

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That said, Xpeng will be coming to a market less enamoured of EV makers. After a blistering rally in 2020, electric car-makers have seen their shares decline this year amid increasing competition from legacy automakers, the global semiconductor shortage and an increasing wariness by investors about holding onto riskier assets.

Xpeng's stock surged 381 per cent from its IPO price to a high of US$72.17 in November, but has since fallen about 44 per cent, giving the Guangzhou-based company a market capitalisation of around US$32 billion.

The carmaker also faces intense competition at home. Rival Chinese EV companies Nio and Li Auto - both traded in the US - are also planning listings in Hong Kong, Bloomberg News has reported. The trio compete in an increasingly crowded market in China - the world's largest for electric-vehicles - as tech giants, traditional automakers and startups muscle into the sector.

Xpeng has yet to turn a profit and has pledged to break even by late 2023 or 2024. Its revenues have been increasing, however, rising to 2.95 billion yuan (S$612.1 million) in the first quarter and its deliveries grew 483 per cent in May compared to the previous year.

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