XPeng Inc. (XPEV) stock prices were down by 8.34% as of the market closing on June 22nd, 2021, bringing the price per share down to USD$39.99 at the end of the trading day. Subsequent pre-market fluctuations have seen the stock rise by 4.68%, bringing the price per share up to USD$41.86.
Honk Kong Listing
The New York-traded electric vehicle manufacturer, Xpeng, Inc., has been authorized to be listed on the Hong Kong stock exchange. This move could see the company generate as much as USD$2 billion in Honk Kong as early as the current fiscal year. The company’s American depositary receipts were up at a peak of 4.7% during premarket hours on June 23rd, 2021, with the stock having exhibited a 170% increase since its initial listing in August 2020.
U.S.-China Tensions
Xpeng’s inclusion in the Honk Kong listing would end a period that marked an absence of the listing of U.S.-listed Chinese firms. The previous such listing was for the travel firm, Trip.com Ltd., in April 2021, which ended up raising almost USD$1.25 billion. Investors hope Xpeng’s listing marks the resumption of the flocking of U.S.-traded Chinese companies to the Asian financial hub since 2018, when regulations were eased to allow the likes of Alibaba and gaming giant NetEase to list.
Relations Improving
Stateside-traded Chinese firms are given scaffolding by a listing in Honk Kong, which acts as a hedge against the risk of being delisted from the U.S. exchanges. This allows the companies to broaden their investor base closer to home. Following a bill passed in the U.S., public Chinese companies could find themselves delisted from U.S. stock bourses if they do not allow their audits to be reviewed by American regulators.
Landmark Listing
Xpeng’s listing is a dual primary listing, which means it isn’t exempt from some of the Asian hub’s listing rules like it would be if it were a secondary listing. Because the company has only been public in New York since August 2020, it doesn’t meet the requirement of having a two-year listing history for it to merit a secondary listing in Honk Kong. The primary dual listing will be the biggest of its kind in Honk Kong in almost 3 years, when biotech drugmaker BeiGene Ltd. raised USD$903 million.
Future Outlook for XPEV
Armed with a massively expanded potential investor-base, XPEV is poised to capitalize on the broadened opportunities afforded to it from its Hong Kong listing. The company is keen to continue its trajectory of success and usher in unprecedented growth with access to more capital. Current and potential investors are hopeful that management will continue to leverage the resources at their disposal to facilitate significant and sustained increases in shareholder value.
