TECH NEWS: Chinese electric vehicle start-up Li Auto plans to raise about $1.93 billion in a Hong Kong secondary listing.
The Nasdaq-listed company said it will offer 100 million class A ordinary shares to investors at a price of no more than HK$150 or $19.29. The final price will be announced on 6 August. At HK$150 per share, Li Auto would raise HK$15 billion or $1.93 billion.
Li Auto is going ahead with the listing despite a recent massive sell-off in Chinese tech stocks that was triggered by regulatory crackdowns affecting everything from food delivery to transportation services. Chinese electric vehicle makers are trying to take advantage of the excitement around the industry to raise funds. Last month, rival Li Auto’s Xpeng raised around $1.8 billion in a Hong Kong listing.
But Li Auto is also tapping into a trend of US-listed Chinese companies looking to raise money closer to home. Alibaba, NetEase and JD.com are among the Chinese tech giants that have made secondary listings. Doing a secondary listing in Hong Kong also helps hedge against some of the geopolitical risks that have spilt over into financial market regulation.
Earlier this year, the US Securities and Exchange Commission adopted rules imposing stricter audit requirements for foreign companies listed in the US. And last month, the SEC also said it will require additional disclosures from Chinese companies seeking to list on US exchanges. Li Auto said it plans to use the proceeds from its stock offering for research and development of future technologies and models and expand production capacity and its retail presence.
Competition in the Chinese electric vehicle market is intensifying. Start-ups such as Li Auto, Xpeng and Nio are competing against established players such as BYD and Tesla and traditional automakers. Li Auto said on Sunday it delivered 8,589 Li One vehicles in July, a monthly record. The Li One SUV is the company’s only model on the market. It is a hybrid vehicle that comes with a fuel tank to charge the battery, extending the 180-kilometre driving range by about 620 km (385.35 miles).