BEIJING (AFP) – Chinese electric car maker Li Auto began trading in Hong Kong yesterday after a USD1.5 billion initial public offering it hopes will help it break out from its mainland market.
The listing of the company regarded as a possible rival to Elon Musk’s Tesla comes as firms already traded in New York – such as Li – seek exposure in the Asian financial hub as a hedge against China-United States (US) tensions that could see them removed from US exchanges.
Shares in Li Auto were trading at HKD116.90 at 7.30GMT yesterday, against an IPO price of HKD118, having fallen around two per cent earlier in the day.
“We want to be a winner, not just a mere participant, in the global market,” Li Auto co-founder and president Shen Yanan told Hong Kong’s South China Morning Post in an interview published yesterday.
“To win market share overseas, a car company has to develop the right product to attract customers with tastes” that are different from those in China.
“We have set up a team dedicated to the overseas markets and we are meticulously working on the plans to find a winning formula.”
The listing – just a month after rival XPeng’s Hong Kong IPO – is “an opportunity for Li to cash in while their valuation is higher”, founder of consultancy Sino Auto Insights Tu Le told AFP.
It will allow the company to add to its USD1.1 billion war chest, assembled when it went public in New York in July 2020.
Li Auto plans to dedicate almost half of its net proceeds to research and development including in “ultra-fast charging technologies”, according to its prospectus.
Part of the funds will also go towards developing “intelligent vehicle and autonomous driving technologies”.
China is the world’s largest car market with electric cars accounting for 10 per cent of all car sales from January to July, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.
The industry group expects new-energy vehicles to make up 25 per cent of car sales by 2025.
Drivers have been flocking to local auto brands in recent months as Chinese regulators question Tesla over safety concerns.
“Many domestic brands are newer, more recognised for their smart capabilities,” Tu said.
“They really target their consumers more precisely through their digital marketing campaigns.”
