EV Maker Li Auto Seeks $1.9 Billion in Hong Kong Listing

(Bloomberg) -- Electric vehicle maker Li Auto Inc. is looking to raise as much as HK$15 billion ($1.9 billion) in its Hong Kong listing, pushing ahead with its offering even as investors continue to reel from China’s clampdown on business.The Beijing-based firm is offering 100 million shares for as much as HK$150 each, according to a statement.

The offering is being split into 10 million shares for Hong Kong retailers and the rest for international investors, whose shares could be priced higher, Li Auto said in the statement.

Li Auto is following in the footsteps of larger rival XPeng Inc., which raised $1.8 billion in a dual primary listing in the city in June. U.S.-traded Chinese companies are pivoting to so-called homecoming listings in Hong Kong as a way to hedge against the risk of being delisted from American exchanges as well as broadening their investor base.

However the more immediate regulatory risk has appeared to come from closer to home. Chinese stocks slumped after a series of moves by Beijing to rein in firms in some of its most successful sectors. They include proposals that almost all Chinese companies seeking to go public overseas submit to a cybersecurity review, and a drastic overhaul of the country’s booming private tutoring industry.

Li Auto shares are down 2.9% since the beginning of July, giving the company a market value of about $30 billion. The shares fell about 2.5% in late trading Monday. XPeng is currently trading little changed from its offer price in Hong Kong.

Like XPeng, Li Auto’s listing will be dual primary. The EV firms aren’t eligible for the waiver that some greater China-based companies use to seek a secondary listing, as they don’t have a track record of at least two years’ trading on another exchange.

Li Auto raised $1.3 billion in its U.S. initial public offering a year ago. Its shares have risen 193% from its offer price as part of a global rally in EV stocks.

The carmaker is still loss-making, recording a net loss of $54.9 million in the first three months of this year on revenues of $546 million, its prospectus shows.

It plans to set the final price for the listing Aug. 6 and trading is slated to begin Aug. 12, according to a filing to Hong Kong stock exchange.

Goldman Sachs Group Inc. and China International Capital Corp. are joint sponsors for Li Auto’s Hong Kong listing, while UBS Group AG is the financial adviser.

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