Longtime Nio Backer Hillhouse Capital Sells Off Entire Position In Chinese EV Maker

A longtime Nio Inc – ADR NIO investor has offloaded its entire stake in the Chinese electric maker, according to an SEC filing made Friday after the market close. 

Dropping Off From Nio

Hillhouse Capital, a China-focused private equity investor, disclosed in the filing that it sold off its entire stake in Nio over the fourth quarter of 2019.

After nearly doubling its holding in Nio to 41.9 million shares at the end of the second quarter of 2019, Hillhouse took a U-turn and reduced its stake by two-thirds in the third quarter to 13.37 million.

By the end of the fourth quarter, the PE investor had liquidated all of its holdings.

Incidentally, Hillhouse was third largest institutional investor in Nio, with a 6.2% stake, according to Nio's annual report released in April 2019.

Ahead of Nio's September 2018 IPO, Hillhouse subscribed to to $100 million Series A fundraising round in 2015 and an incremental $600-million Series C in 2017, according to Tech Node.

Nio's Lackluster Stock Showing

After listing at $6 and closing the debut session at $6.60, lower than its IPO price of $6.26 per ADS, Nio's shares rose to a high of $13.80 Sept. 14, 2018.

Subsequently, the stock consolidated, mostly between $7 and $9, until mid-March 2019.

As Nio suffered due to company-specific and macroeconomic weaknesses, the stock was pummeled, dropping to a low of $1.19 by October 2019.

The stock made a modest recovery late last year and now trades around the $4 level.

Even as deliveries began to improve after 2019's summer lull, the COVID-19 outbreak is now affecting the company.

Nio recently secured $200 million in funding.

Reacting to Hillhouse Capital's offloading, a Nio executive was quoted by  Chinese media as saying that the company respects the investor's choices.

Nio shares were trading 3.98% higher at $3.92 at the time of publication Tuesday.

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Photo courtesy of Nio.