XPeng debuts in Hong Kong with US$1.8 billion IPO

The electric carmaker’s shares traded nearly 1.8 per cent higher on opening

Shares in electric carmaker XPeng debuted in Hong Kong on Wednesday, as Chinese-based firms trading in the US seek to avoid scrutiny by China’s regulators by listing closer to home.

XPeng, which is already Nasdaq-listed and is chasing Tesla in China, is the latest Chinese company to list on the Hong Kong stock exchange, following other big tech firms such as video platform Bilibili and search giant Baidu.

The car maker raised US$1.8 billion in its initial public offering (IPO) ahead of the start of trade in Hong Kong on Wednesday, selling 85 million shares at US$21.20 each.

Its shares traded nearly 1.8 per cent higher on opening.

The IPO comes as Chinese companies face pressure to list closer to home, and shortly after ride-hailing giant Didi Chuxing attracted scrutiny over data security when it listed abroad.

Companies have to split their business, said Ferdinand Dudenhoffer, head of the Center Automotive Research in Germany. Didi's fate shows how important the protection of Chinese customer data is.

Bloomberg News has reported that two other US-listed Chinese electric car makers - Nio and Li Auto - are also aiming to list in Hong Kong.

China is the world's largest car market and Beijing expects new energy vehicles to comprise 25 per cent of car sales by 2025.

XPeng has come a long way since co-founder He Xiaopeng proposed a merger with another struggling electric carmaker Nio. According to Chinese media reports, Nio's founder William Li turned him down.

XPeng eventually raised US$1.5 billion in its US IPO last year. In fiscal year 2020, the Tesla-challenger delivered more than 27,000 vehicles.

The proceeds will help expand its product portfolio, technology development and speed up expansion, its prospectus said.

Vehicles in its pipeline include an SUV featuring an autonomous driving system to be launched next year, targeting China's growing base of technology-savvy middle-class consumers.

But even as revenues rose from 9.7 million yuan in 2018 to 5.8 billion yuan (US$900 million) in 2020, the company has yet to turn a profit.