Nio, XPeng File For Hong Kong Listings: Report

NIO Limited NIO and XPeng Inc. XPEV have made further progress in their endeavor to pursue a listing outside of the U.S.

What Happened: Nio and XPeng have filed regulatory applications to list their shares on the Hong Kong stock exchange, local Chinese media outlet cls.cn reported, citing people familiar with the matter.

Li Auto Inc. LI has yet to submit its application, the report said. 

Nio and XPeng spokespeople declined to comment on the report when contacted by Benzinga.

The news of the Chinese EV trio — Nio, XPeng and Li Auto — contemplating Hong Kong listings was initially broken by Reuters in early March. The Reuters report said the companies are seeking to offer 5% of their expanded share capital in a bid to raise a cumulative $5 billion.

Later on March 22, an IFR report said the companies have hired investment managers to assist with the offerings. The report further said Nio would undertake a secondary listing, while XPeng and Li Auto are forced to file for primary dual listings due to regulatory restrictions.

Related Link: Chip Shortage Caught Nio Off Guard: Report

Why It's Important: The Chinese EV makers, which were among the best-performing stocks of 2020, have not had a smooth ride so far this year.

Apart from market-wide factors that have pressured these stocks, the companies also witnessed a slowdown in sales in February. Indications that sales could remain pressured amid a chip supply shortage are intensifying the weakness further. 

Nio is shutting down production at its Hefei plant for five days starting Monday. It also lowered its deliveries guidance for the first quarter.

A domestic listing is expected to expand the investor base of the companies, creating access to further capital. Additionally, it will serve to remove the overhang of a U.S. regulatory clampdown on U.S.-listed Chinese companies.

LI, NIO, XPEV Price Action: In premarket trading, Nio shares were down 2.32% to $35.29, XPeng was receding 1.31% to $31.72 and Li Auto shares were moving down 1.22% to $23.41. 

Related Link: Hong Kong Approves Bilibili's $3B Dual Listing

Photo courtesy of XPeng.