Chinese EV makers Nio and Xiaopeng consider second IPO on Hong Kong Stock Exchange

William Li, CEO of the Chinese electric vehicle company, is introducing NIO's electric car 'ET7'.
[Image source= AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Chinese electric vehicle manufacturers Nio and Xiaopeng are reportedly considering listing on the Hong Kong Stock Exchange, according to Bloomberg News on the 9th (local time). Earlier, another Chinese electric vehicle company, Li Auto, was also known to be considering an initial public offering (IPO) in the Asian market.

All three companies are already listed on the New York Stock Exchange. They secured billions of dollars through their NYSE listings and have continuously raised funds through loans and rights offerings after going public.

However, ongoing losses appear to have depleted their cash reserves. Among the three, only Li Auto posted a surprise profit in the fourth quarter of last year, while Nio and Xiaopeng continue to report losses.

Xiaopeng announced its fourth-quarter results on the 8th, stating that it would not reach the breakeven point until the end of 2023 or early 2024.

Nevertheless, investor interest in electric vehicle companies remains high due to the expected growth of the electric vehicle market.

The China Passenger Car Association (CPCA) reported that sales of new energy vehicles, including electric vehicles, reached 97,000 units in February, a 675% increase compared to the same month last year. The CPCA explained that while this could be partly due to the base effect from the COVID-19 outbreak last year, sales have doubled even compared to February 2019.

Xiaopeng’s stock price rose about 80% after its NYSE listing in August last year. However, considering only this year’s performance, it has fallen by 37%. Recently, the stock price of U.S. electric vehicle maker Tesla Motors has plummeted, dragging down related stocks. Nio’s stock price rose more than 11 times last year but has declined by 28% this year.