Shares of Electric Vehicle Maker Xpeng Closed Flat
Shares of U.S.-listed Xpeng which sells electric cars closed flat on July 7 in their Hong Kong debut. It issued more than 80 million Class A ordinary shares at a price of 165 Hong Kong dollars each. Last month, the electric vehicle maker from Guangzhou stated that it would price shares at no more than 180 Hong Kong dollars each. The electric carmaker raised gross proceeds of 14.02 billion Hong Kong dollars ($1.8 billion).
The Guangzhou-based company will use the proceeds from Hong Kong listing to expand its products. It also plans to develop more advanced technologies.
The company delivered more than 6,000 vehicles in June, that’s a 617% increase year-on-year and a monthly record. It delivered more than 17,000 vehicles in the second quarter of the year, above its own guidance.
Xpeng is already listed in the U.S. Typically, Chinese companies listed on Wall Street will do what’s known as a secondary listing, usually in Hong Kong, and Xpeng is not an exception. This is where a company, listed on one stock exchange, goes on to sell shares on another. But the company’s share offering is a dual-primary listing. That means it will be subject to the regulations and oversight of both U.S. as well as Hong Kong regulators, which is not the case with a secondary listing.
Xpeng and regulators
U.S.-listed Chinese companies have looked in Hong Kong as a way to limit the impact of tensions between China and the U.S. The electric vehicle maker Xpeng made the right decision.
In 2021, U.S. Securities and Exchange Commission adopted rules that impose stricter auditing requirements on foreign companies listed in the U.S. Those requirements carry the threat of delisting for companies that violate the rules.
Chinese companies listed in the U.S. could also face problems at home. China decided to step up the supervision of companies listed in other countries. The country’s government plans to improve rules around cross-border data flows and security.
Beijing’s decision comes after regulators launched a cybersecurity review into ride-hailing company Didi. The ride-hailing giant operates in numerous countries. The company gathers huge amounts of real-time mobility data every day. It uses some of the data for autonomous driving technologies as well as traffic analysis.
Chinese regulators ordered app stores to stop offering ride-hailing giant’s app after finding that Didi illegally collected users’ personal data. The company stopped registering new users and made the decision to remove its app from app stores. The ride-hailing giant decided to make changes to comply with the rules.
