Update: Tesla-Rival Xpeng Targets $1.8 Billion in Hong Kong Listing

Chinese electric vehicle (EV) manufacturer Xpeng Inc. has set a guideline issue price of HK$165 ($21.25) per share for institutional investors ahead of its planned dual primary listing on the Hong Kong exchange next week, Caixin has learned.

The price is 8.33% lower than the Guangzhou-based carmaker’s initial offer price of HK$180 per share. It values the flotation at just over HK$14 billion, which would make it the fifth-largest new offering on the bourse this year.

The listing was several times oversubscribed by institutional investors, according to people close to the deal. Xpeng, which already trades its shares in New York, will hold a meeting on Wednesday to decide the final listing price.

Xpeng declined Caixin’s request for comment. According to its listing plan, the company will offer more than 80 million class-A shares on Hong Kong’s main board on July 7. Of those, 5% will be sold in Hong Kong and 95% will be international placements.

Institutional investors are divided over the listing, Caixin understands. While some are optimistic about the automaker’s growth potential in China’s booming EV and autonomous driving sectors, others are concerned about its profitability and technological competitiveness, as well as what they see as excessive market hype around the company.

U.S.-listed EV stocks are on the road to recovery after a spring decline driven by concerns over inflation, increased competition from traditional automakers and a global shortage of the semiconductors that power next-generation vehicles.

Xpeng’s New York equities are up by more than 50% since the start of May and are nearing prices last seen in February. Its two main U.S.-listed Chinese rivals, Nio Inc. and Li Auto Inc., have moved up 27% and 76% respectively over the same period.

All three carmakers are believed to be planning so-called homecoming listings in Hong Kong as part of efforts to offset the risk of being delisted from American bourses, a fate that has already befallen companies adjudged to have close ties with China’s military and that may yet ensnare those that do not give American auditors satisfactory access to their books.

The planned dual listings may help the automakers raise capital to fend off competition from a number of domestic EV upstarts as well as global industry leader Tesla Inc., whose aspirations in China suffered a blow this week when the market regulator ordered a recall of more than 285,000 cars it has sold in the country in order to fix a safety issue.

The price of Xpeng’s New York-listed shares declined 2.18% to close at $44.32 on Tuesday. Nio finished up 1.9% at $50.34, while Li Auto ended up 1.6% on $34.25.

Contact reporter Matthew Walsh (matthewwalsh@caixin.com) and editor Flynn Murphy (flynnmurphy@caixin.com)

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