Chinese EV Maker Xpeng Sets Term For Up To $1.1B IPO

As speculated, Chinese electric vehicle maker Xpeng Inc. amended its preliminary prospectus filed with the SEC, disclosing the price range and the size of its initial public offering in the U.S.

Xpeng's Updated IPO Terms:

In a second amendment to its F-1 filing late Friday, Xpeng said it plans to offer 85,000 American Depository Shares, or ADSs, each representing two Class A ordinary shares in the proposed IPO. The company expects to price the offering between $11 and $13.

At the mid-point of the estimated price range, the offering would fetch the EV maker gross proceeds of $1.02 billion.

As disclosed already, the company has applied to list the ADSs on the NYSE under the ticker symbol XPEV.

The company has also provided an overallotment option of another 12.75 million ADSs to underwriters, provided the offering is oversubscribed.

The Guangzhou, Guangdong-based company said four of its existing shareholders - Alibaba Group Holding Ltd – ADR BABA, Coatue, Qatar Investment Authority and Xiaomi, and/or their affiliate have expressed interest in purchasing an aggregate $400 million worth of shares in the offering. Additionally, PRIMECAP Management is proposing to purchase up to $100 million worth of ADSs.

At the midpoint of the IPO price range, the planned purchases by these investors represent about 49% of the size of the offering.

Xpeng said it intends to use the net proceeds for R&D of smart vehicles and technologies, marketing expenses and for other corporate purposes.

Credit Suisse, JPMorgan and BofA Securities are the lead underwriters for the offering.

Xpeng's Business: Xpeng is a smart electric car vendor in China, selling two modes – the G3 SUV and the P7 four-door sedan.

Founded in 2015, the company provides customers with EVs characterized by innovation in autonomous driving, dubbed XPILOT, smart connectivity and core vehicle systems.

The G3 was among the top three best-selling electric SUVs in China in 2019, the company said in the filing, citing IHS data

Source: Xpeng F-1 filing

In July, the company delivered 2,451 smart EVs, including 1,641 units of P7 and 810 units of G3. In comparison, domestic rival Nio Inc - ADR NIO delivered 3,533 vehicles in the month.

Xpeng sells through a direct sales channel and franchised stores. As of June 30, 2020, the company had 44 direct stores and 130 franchised stores.

Xpeng completed a Series C+ funding in August 2020, raising $900 million from U.S. investors.

Given the lucrative nature of the EV market and the advancements in battery technology, manufacturers of alternative energy vehicles are on the cusp of capitalizing on a burgeoning market that has room to accommodate multiple players.

Xpeng Financials: For fiscal year ended Dec. 31, 2019, Xpeng reported revenues of $328.55 million, comprising $307.32 million in vehicle sales and $21.23 million in services and others.

The company reported a net loss of $1.88 per share for the year.

The company's revenues for the six months ended June 30, 2020, came in at $141.94 million, an 18.6% year-over-year decline, but the net loss per share narrowed to 81 cents per share.

At the end of June 31, 2020, the company had cash, cash equivalents and restricted cash of about $268.26 million.

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