On Wednesday, shares of Xpeng Motors rose 4% amid reports that Hong Kong’s regulator had approved their listing on the Hong Kong Stock Exchange. Xpeng can attract more investors and about $2 billion by listing on the Asian stock exchange.
On Wednesday, shares of Xpeng Motors (XPEV) surged by 4.05% following media reports that Chinese rival Tesla (TSLA) had received regulatory approval to list the shares on the Hong Kong Stock Exchange.
As per CNBC, the auto manufacturer plans to raise between $1billion and $2billion from its dual primary listing in Hong Kong. Due to the dual listing, Xpeng will now be subject to the rules and oversight of both the US and Hong Kong regulators, which makes this procedure different from a secondary listing.
Major US banks like JPMorgan Chase (JPM) and Bank of America (BAC) are expected to underwrite Xpeng’s Hong Kong listing.
Since August last year, Xpeng Motors shares have traded on the US NYSE, and their value has more than tripled from their first day of trading to Wednesday, June 23rd. The share price of Xpeng Motors increased by 100%. However, the share price of Xpeng has fallen from its highs in 2020 and early 2021.
Listing in Hong Kong stock exchange is important to Xpeng and other Chinese EV manufacturers because of two reasons:
- Attracting Asian investors in order to improve financing
- Reducing risks associated with US stock market listings
Under a US bill, Chinese public companies could be restricted from listing on the US stock exchanges if federal auditors are not allowed to examine their audits.
With the EV market becoming more competitive, Xpeng’s Hong Kong listing is crucial to the company’s continuation as it needs investment to expand production, upgrade its auto lineup, and develop advanced battery technology and autopilot features to gain market share.
In May this year, Xpeng sold 5,686 vehicles, up 483% from a year earlier and more than 5,147 vehicles in April.
The company also began generating revenue last month from its XPILOT 3.0 driver assistance software. It has been hailed as “an important milestone in XPeng’s history” by the company’s management and market analysts.
As reported at the beginning of the month, Citi (C) analyst Jeff Chang raised his price target for XPeng from $50 to $50.30. Xpeng is considered to be more efficient than Nio, according to the expert.
At the time of this writing, XPeng Inc. (XPEV) share price gained 0.73% to $41.92 in the current market trading session. The company’s market cap reached $32.66 billion.