China EV Startup Leapmotor to Mull $1 Billion Hong Kong IPO
(Bloomberg) -- Chinese electric-vehicle maker Leapmotor is considering an initial public offering in Hong Kong that could raise at least $1 billion, according to people familiar with the matter.
The startup, whose backers include video surveillance company Zhejiang Dahua Technology Co. and Sequoia Capital China, has held initial discussions with advisers about the IPO, the people said, asking not to be identified as the information isn’t public. A listing could come as soon as next year, they said.
Details such as fundraising amount and timing are preliminary and subject to change, the people added. A representative for Leapmotor declined to comment on the potential IPO, while Dahua did not immediately reply to requests for comment.
With a listing on the Asian financial hub’s bourse, the Hangzhou-based company would join rivals Xpeng Inc. and Li Auto Inc. The pair raised a combined $3.8 billion in dual primary listings over the summer, giving the U.S.-traded firms a foothold in Hong Kong as tensions between Washington and Beijing continue to simmer.
China’s EV startups are expected to benefit from the country’s push to reduce greenhouse gas emissions and go “carbon neutral” by 2060, making it one of the sectors that so far has not been hit by Beijing’s slew of regulatory actions.
The year-long semiconductor shortage has not spared any carmaker globally, with Nio Inc. -- seen as Tesla Inc.’s closest competitor in China -- last month lowering its delivery outlook for the third quarter because of the continued uncertainty over chip supply.
Leapmotor makes electric vehicles using chips or core technology that are designed in-house, according to its website. In September, it received 8,754 pre-orders, while it delivered 4,095 vehicles, a fivefold jump from the same period last year, according to a posting on the company’s WeChat account.
In August, the company announced a 4.5 billion yuan ($697 million) investment round, of which 3 billion yuan was contributed by a unit of the Hangzhou government.
Leapmotor was founded in 2015 by chairman Zhu Jiangming and Dahua chairman Fu Liquan, according to a press release on its website. In 2019, Dahua and seven other Chinese companies were placed on a U.S. blacklist, accusing them of being implicated in human rights violations in the country’s Xinjiang region. The company said in a statement that the decision lacked any factual basis.
©2021 Bloomberg L.P.