By Xinhua writers Liu Yanan and Pan Lijun
NEW YORK, Aug. 30 (Xinhua) -- The initial public offerings of multiple Chinese electric vehicle (EV) makers on U.S. stock exchanges saw remarkable performance recently thanks to China's leading status in EV industry, swift rise of unconventional EV manufacturers, sufficient liquidity on the financial market and investors' quest for higher returns.
DEAL UPSIZED
Guangzhou-based smart EV maker XPeng Inc. successfully floated its shares on New York Stock Exchange on Thursday, witnessing investors' strong appetite for buying from both the primary and the secondary market.
XPeng decided to sell 99.73 million American depositary shares (ADS) rather than the initial placement size of 85 million ADS at the last stage in the offering due to strong market demand.
Furthermore, XPeng finally set the price of its ADS at 15 U.S. dollars per share, topping the estimated price range of 11 dollars to 13 dollars.
XPeng raised nearly 1.5 billion dollars through the offering with the potential to sell another 14.99 million ADS to its underwriters like Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, and BofA Securities, Inc. under a 30-day option arrangement.
Approximately 50 percent of the net proceeds of this offering will be used for research and development of smart EVs and technologies, while 30 percent of the net proceeds of this offering will be used for marketing and expansion of sales channels, the company said in its prospectus.
XPeng stock opened at 23.1 dollars per ADS on its debut of trading on Thursday and closed at 21.22 dollars per ADS, surging 41.47 percent from its IPO price.
As of the closing on Friday, XPeng had a market capitalization of 16.74 billion dollars.
INVESTORS IMPRESSED
"I'm very pleased to see the great performance of XPeng at the roadshow and investors are very active," said He Xiaopeng, chairman and CEO of XPeng on Thursday.
Investors think highly of the depth and scale of XPeng's input in smart features and were impressed by XPeng's intelligent operating system, the entrepreneur told Xinhua.
He said that the listing was a milestone for the company as it offered an opportunity for his team to better communicate with investors, which is conducive to the company's long-term development.
"We will continue to improve our development and research, enhance innovation and expand sales channels," said the chief executive.
Founded in 2015, XPeng aims to bring smart EVs to consumers through innovation in autonomous driving, smart connectivity and core vehicle systems.
XPeng not only developed automatic driving software but also developed relevant hardware with its autonomous driving system XPILOT featuring assisted driving and parking functions tailored for driving behavior and road conditions in China, according to the company.
He said he is confident that China's smart EV will have a promising future, buoyed by the nation's huge EV market and a growing base of technology-savvy middle-class consumers.
China's EV market represented 45.1 percent of the global EV sales volume and is expected to grow at a CAGR (compound annual growth rate) of 29.4 percent from 2019 to 2025, reaching 4.2 million units in 2025, according to IHS Markit Report.
OPPORTUNITIES NOT SHUNNED
Chinese companies listed on U.S. bourses like KE Holdings, Li Auto and Kingsoft Cloud Holdings remain very popular despite the current tension in Sino-U.S. ties, said Kevin Chen, chief economist with U.S. wealth management firm Horizon Financial.
Investors from New York continue to welcome enterprises with growth potential, no matter whether such companies come from China or any other country, said Chen at an on-line dialogue.
"I think it's not as bad as said in the media. From investors' perspective, many investors including those from Wall Street want to invest in China," Chen said.
On July 30, Chinese EV manufacturer Li Auto set its IPO price at 11.5 dollars, above the estimated price range of 8 to 10 dollars.
The shares of Li Auto opened 35 percent higher than its IPO price and closed 43 percent higher on its first day of trading on NASDAQ.
INO Inc., another EV brand listed on NYSE since September 2018, has seen its share price shoot up 364.82 percent from the second half of 2020.
The S&P U.S. Listed China 50 index, which is designed to track the performance of the 50 largest Chinese companies listed on U.S. exchanges by total market cap, has gained 64.71 percent since its recent low on March 18 and the index refreshed its record high of 4,492.1 points on Wednesday.
Still, a number of Chinese companies listed on U.S. bourses like Alibaba Group Holdings, JD.com Inc., NetEase Inc. and Pinduoduo Inc. have resorted to a secondary listing on Hong Kong Stock Exchange or other bourses so as to avoid risks from policy-driven delisting.
Recently, Baillie Gifford, Temasek and other major shareholders of Alibaba Group have converted billions of dollars in U.S. shares for the e-commerce giant's stocks listed in Hong Kong, with the same consideration in mind.
More Chinese ADRs (American Depository Receipts) listed in the United States would seek dual-listing in Hong Kong and more institutional shareholders would convert their U.S. holdings to Hong Kong shares, said a recent report by Global Wealth Management with UBS AG.
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