Xiaopeng Motors “dual listing” attracts attention

According to a Bloomberg report on the 23rd, Chinese electric car manufacturer Xiaopeng has obtained a listing license from the Hong Kong Stock Exchange, becoming the latest Chinese company to return to Hong Kong for listing. The company submitted an updated listing document on Wednesday, indicating that it has been approved by the Hong Kong Stock Exchange. According to people familiar with the matter, Xiaopeng may raise up to US$2 billion in Hong Kong as early as this year. As of press time, Xiaopeng Motors did not respond to this news.

“The Wall Street Journal” reported on the 23rd that Xiaopeng issued new shares in Hong Kong’s initial public offering (IPO) and will have two major listing locations in the United States and Hong Kong after the IPO. People familiar with the matter said that Xiaopeng Motors plans to issue new shares in Hong Kong is also to use the northbound market under the mainland-Hong Kong interconnection mechanism to reach qualified investors in mainland China. Xiaopeng Motors issued shares on the New York Stock Exchange last year and raised 2.5 billion U.S. dollars. Its current market value exceeds 30 billion U.S. dollars.

Bloomberg mentioned that Xiaopeng is not a secondary listing, but a dual primary listing on US stocks and Hong Kong stocks, which is different from other companies that have returned to the country to go public. Because the issuer seeking a secondary listing must have a good regulatory compliance record of at least two years on another eligible exchange, and Xiaopeng only listed in New York last year, which is not qualified. Xiaopeng’s listing and financing in Hong Kong will be the largest dual-primary listing in Hong Kong since biotech drugmaker BeiGene raised US$903 million in Hong Kong three years ago.

In addition to Xiaopeng, other Chinese electric vehicle companies that went public in the United States last year included Weilai Automobile and Ideal Automobile. According to a Reuters report on the 22nd, China Manbang Group was listed on the New York Stock Exchange on the same day. It rose by more than 18% that day and was valued at more than 24 billion U.S. dollars. This is the second largest Chinese company’s listing in the United States so far in 2021.

Bloomberg said that Chinese companies went public in the United States at the fastest rate in history, which to some extent eliminated the tension between the world’s two largest economies.

However, Bloomberg also mentioned that since 2018, companies listed in the United States such as Alibaba Group and NetEase have returned to Hong Kong, the Asian financial center, and online travel company Ctrip just raised about US$1.25 billion through a Hong Kong listing in April this year. Although other financial centers such as Hong Kong have changed their listing rules in recent years to make it easier for new economy companies to go public, this has not prevented companies from going public in the United States. In fact, this kind of transaction is now two-way. Chinese companies listed in the United States are listed in Hong Kong for the second time to expand their investor base and as a means to hedge against delisting risks. This secondary listing raised nearly US$17 billion last year and has raised more than US$8 billion this year. Bankers say that many companies know that they can list in Hong Kong before they go to the United States.

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