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Chinese Electric Carmaker NIO seeks faster secondary listing in HK through an introduction, skips fundraising!
- Last year’s listing was postponed due to structural concerns.
- Nio will not issue fresh shares or seek funds through its Hong Kong listing.
Nio Inc. will begin trading on the Hong Kong stock market next week, opting for a path to listing that does not require the company to issue new shares or raise funds.
The Shanghai-based manufacturer stated in a statement that it has applied for a secondary listing of its Class A ordinary shares on the Hong Kong market by way of introduction. Trading is set to begin on March 10, pending final regulatory permission.
The business applied for a Hong Kong IPO in March 2021, but it was postponed due to regulatory worries about its structure. Chief Executive Officer William Li donated 50M firm shares to a Nio User Trust in 2019, albeit he kept voting rights.
After listing on the Hong Kong exchange last year, the three U.S.-traded Chinese EV manufacturers — Nio, Xpeng Inc., and Li Auto Inc. — have completed a sort of homecoming. The danger of being delisted from US markets is mitigated by the second listing in Hong Kong. Unlike its competitors, Nio, on the other hand, elected to list by way of introduction, which is a faster approach for a firm that is already listed abroad to enter the Hong Kong market. According to the exchange’s website, Nio will not sell shares or raise fresh capital, thus there will be no additional listing costs.
In its Hong Kong IPO, Xpeng raised roughly $2B, while Li Auto raised around $1.7B.
Nio raised $2 billion in American depositary receipts in September after its Hong Kong offering was postponed.
People familiar with the situation told a journalist last year that Didi Global Inc., one of the most high-profile targets in a broad Beijing push to rein in the country’s vast tech sector, has been working with banks for a Hong Kong listing that may be by way of introduction. The deal requires little promotion and allows US investors to trade their shares in Hong Kong for the new equity.
In a climate of regulatory uncertainty, listing by way of introduction is an alternate option for U.S.-listed Chinese businesses, according to Bruce Pang, head of macro and strategy research at China Renaissance Securities Hong Kong Ltd.
Tencent Holdings Ltd., an early investor in the EV business, would lend 41.4 million Class A shares, or around 2.7 percent of the stock on issue, to approved dealers to make accessible to purchasers in Hong Kong to assist trade.
Nio also announced that it has sought a secondary listing by way of introduction on the Singapore stock exchange, which is now being reviewed. According to a Citigroup report, listing in Hong Kong and Singapore will expand the carmaker’s funding choices, decrease political risk, and allow the business to interact more intimately with Asian investors.
Nio, which was founded in 2014, has recovered from a near-death experience to achieve a strong footing in China’s booming electric vehicle industry, with 91,429 units delivered in 2021. The New York Stock Exchange will continue to be the primary listing and trading venue for its American depositary receipts.
Nio’s stock has dropped 34% this year on the New York Stock Exchange.