NEW YORK, Aug. 30 (Xinhua) -- The initial public offerings (IPO) of multiple Chinese electric vehicle (EV) makers on U.S. stock exchanges saw remarkable performance recently thanks to Chinese leading status in EV industry, swift rise of unconventional EV manufacturers, sufficient liquidity on financial market and investors' quest for higher return.
-- Deal upsized
XPeng Inc, a smart EV maker based in Guangzhou, capital of south China's Guangdong Province, successfully floated its shares on New York Stock Exchange on August 27, 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) due to strong market demand, and it finally set the price of its ADS at 15 U.S. dollars per share, topping the estimated price range of 11 U.S. dollars to 13 U.S dollars.
XPeng raised nearly 1.5 billion U.S. 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 U.S. dollars per ADS on its debut of trading on August 27 and closed at 21.22 dollars per ADS, surging 41.47 percent from its IPO price.
As of the closing on August 28, XPeng had a market capitalization valuing 16.74 billion U.S. dollars.
--Investors impressed
"I'm very pleased to see the great performance of XPeng at the road show and investors are very active," said He Xiaopeng, chairman and CEO of XPeng, adding that the listing was a milestone for the company as it offered an opportunity for its team to better communicate with investors.
Investors think highly of the depth and scale of the company's input in smart features and was impressed by its intelligent operating system, the entrepreneur told Xinhua.
He Xiaopeng added that the company will continue to improve our development and research, enhance innovation and expand sales channels, and he is confident about a promising future in China's smart EV, buoyed by the nation's huge EV market and growing base of technology-savvy middle-class consumers.
Founded in 2015, XPeng aims to bring smart EVs to consumers through innovation in autonomous driving, smart connectivity and core vehicle systems.
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
Though Sino-U.S. ties are not in good shape, Chinese companies listed on U.S. bourses like KE Holdings, Li Auto and Kingsoft Cloud Holdings remain very popular, said Kevin Chen, chief economist with U.S. wealth management firm Horizon Financial recently.
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 added.
It is noted that the Chinese EV manufacturer Li Auto also set its IPO price at 11.5 U.S. dollars above estimated price range of 8 U.S. dollars to 10 U.S. dollars on July 30.
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.
NIO Inc., another EV brand listed on NYSE since September 2018, saw its share price surged 364.82 percent starting 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 Aug. 26.
Still, a number of Chinese companies listed on the 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 to avoid risks from policy-driven delisting.
Recently, Baillie Gifford, Temasek and other major shareholders of Alibaba Group have converted billions of U.S. 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 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.
(Contributed by Liu Yanan, Pan Lijun, edited by Jiang Feifan with Xinhua Silk Road, 346129473@qq.com)
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