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Xpeng ADRs Weaker After Pricing Hong Kong Shares at 4% Discount

Stock Markets1 hour ago (Jun 30, 2021 07:34AM ET)

(C) Reuters

By Dhirendra Tripathi – Xpeng (NYSE:XPEV) stock was trading lower by more than 2% in Wednesday’s premarket in New York on reports that the Chinese EV maker has priced the shares for its Hong Kong listing at HK$165 ($21.23), a small discount to its U.S.-listed security.

With on ADR equivalent to two ordinary shares, the Hong Kong pricing came over 4% below the closing price for the ADRs in New York on Tuesday.

The company will raise $1.8 billion through the listing, according to Reuters.

The maker of electric vehicles sold 85 million shares in the deal, equating to some 5% of its expanded capital base, according to its prospectus. There is an over-allotment option to sell a further 12.75 million shares that would raise an extra $270 million.

Xpeng chose a dual primary listing rather than a secondary listing as it has been listed in New York for less than two years. Under Hong Kong rules, a secondary listing requires at least two financial years of good regulatory compliance on another qualifying exchange.

The dual primary listing allows qualified Chinese investors to invest in the company through the Stock Connect regime linking mainland Chinese and Hong Kong markets, according to the exchange’s rules.

On June 2, Citi analyst Jeff Chung raised the target on Xpeng to $50.30 from $50 while maintaining a buy. He argued that based on the terminal value, Xpeng is more valuable than Nio (NYSE:NIO), though the latter’s current market cap is more than twice Xpeng’s..

Xpeng ADRs Weaker After Pricing Hong Kong Shares at 4% Discount

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