Shares of Chinese electric vehicle maker NIO start trading in Hong Kong
NIO Inc. shares NIO,
began trading on a secondary listing on the Hong Kong stock exchange on Thursday, becoming the latest U.S.-listed Chinese electric vehicle maker to offer shares closer to home amid growing geopolitical uncertainty.
Shares of the Shanghai-based company were trading at HK$161.80 at midday, equivalent to around $20.69. The move reflects positive investor sentiment a day after NIO’s U.S. Deposit shares rose 12% to $20.17 amid a broad rally for tech stocks.
NIO, which is listed on the New York Stock Exchange in 2018, launched shares in Hong Kong as an IPO, meaning it did not issue new shares or raise new funds as part of the offer.
The move was likely due to less-than-ideal market conditions, with NIO waiting for a better time to raise funds through a new share offering, said Bo Pei, research analyst at US Tiger Securities. He noted that US-listed peers Li Auto Inc. and Xpeng Inc. ended their secondary listings in Hong Kong last summer, when better market conditions allowed them to take advantage of higher valuations to raise cash. funds.
NIO shares found favor with investors earlier in the pandemic, but came under pressure as Beijing and Washington stepped up scrutiny of U.S.-listed Chinese companies, electric vehicles and other growth stocks slipping back at a time when risk appetite was lower as well as concerns about rising inflation.
NIO’s US-listed certificates of deposit are down 51% over the past 12 months, including a 36% decline so far in 2022.
HSBC has a buy rating and target price of $23.96 on NIO’s US stock. It said in a report last month that NIO is likely to expand its market share with three new premium electric vehicle models it will launch this year and improved self-driving capabilities.