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• Special Xpeng IPO in Hong Kong
• Billions in fresh capital announced
• Market position is to be strengthened
Xiaopeng Motors, or Xpeng for short, is already listed in the USA and is one of the electric car manufacturers that is traded as a competitive competitor to Tesla. Xpeng has already firmly established itself on the Chinese e-car market, and now the shares are to be made more palatable to more domestic investors with a special IPO.
Xpeng Goes Hong Kong Stock Exchange – Numbers Details
Xpeng Motors has received the green light to go public on the Hong Kong Stock Exchange. An insider reportedly told CNBC that the Guangzhou-based electric car maker could raise one to two billion US dollars as part of the IPO.
Details released by the company recently disclosed that Xpeng will issue a total of 85 million new Class A common shares. The global offering will initially comprise 4.25 million and the public offering in Hong Kong 80.75 million shares. Following the listing, the shares already listed on the NYSE could be converted into replacement shares, reports IT TIMES.
More investors? Xpeng becomes part of the Stock Connect program
The company is already listed on the NYSE in the USA. A listing on another exchange is actually nothing unusual, but Xpeng is taking a special step: Instead of a so-called second listing, the Tesla competitor is aiming for a dual primary listing. This means that Xpeng is not only subject to the US but also to the Hong Kong regulatory authority and must therefore adhere to the regulations of both countries.
In addition, however, this also means access for more investors: the second primary listing means that the Chinese car manufacturer is part of the “Stock Connect” program. This is intended to create a link between the markets in mainland China and the Hong Kong stock exchange by easing restrictions. “Stock Connect” allows Chinese investors to purchase shares in certain Hong Kong and Chinese companies that are listed in Hong Kong. At the same time, foreigners should be able to acquire Chinese A-shares listed on the mainland in a less restrictive way than before. As Goldman Sachs explains, this contributes in particular to the diversification of the portfolios of Chinese investors.
Regulatory tensions plus more competition
Xpeng’s move comes in a changed environment: the political tensions between China and the USA, which were particularly fueled by the Trump policy, have subsided, even if they continue to smolder in the background. In addition, the US Securities and Exchange Commission (SEC) has stricter examination requirements for foreign companies that are listed on American stock exchanges.
At the same time, competition among electric car manufacturers is currently intensifying. Especially in China: The local market is considered the most important for e-car companies. Tesla also dared to take the step to China with the construction of a gigafactory and since then has been fighting for the favor of those interested in cars with NIO, Li Auto and Co. But traditional car manufacturers also want to win over buyers with their own electric vehicles or hybrids. The pressure of competition is correspondingly high. Xpeng therefore also collects the fresh money to assert itself in its home market.
Finanzen.net editorial team
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