Chinese EV start-up NIO seeks quicker secondary listing in Hong Kong via introduction, skips fundraising

Companies that seek a listing by introduction are able to do so because their existing shares are already widely held

Shanghai-based carmaker has applied for a listing by way of introduction in Singapore as well

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An ES8 EV is displayed at a showroom in Shanghai, in this file photo from March 2021. Photo: Bloomberg

Published: 12:33pm, 28 Feb 2022

Shanghai-based electric vehicle (EV) maker NIO said on Monday it had received an approval in principle from the Hong Kong stock exchange for its application to list by way of introduction.

The carmaker, which has sought a secondary listing outside New York amid the looming risk of a delisting in the US, is the only US-listed Chinese EV maker that has opted for a secondary listing without selling new shares or raising new funds. If the listing goes as planned, its shares will be listed on the main board in Hong Kong on March 10, under the stock code “9866”.

Companies that seek a listing by introduction are able to do so often because their existing shares are already widely held, so that there will already be an open market for their shares after the new listing, even without marketing arrangements by underwriters.

“If the company is focused more on getting a faster listing, rather than on fundraising, listing by introduction is an alternative option for US-listed Chinese companies to secure a ‘plan B’ amid regulatory uncertainties and potential delistings,” said Bruce Pang, the Hong Kong-based head of macro and strategy research at investment bank China Renaissance.

The risk of a US delisting has been a key driver that has already sent a steady pipeline of Chinese companies seeking a listing closer to home, many of which were able to raise sizeable IPOs of more than US$1 billion each in 2020 and last year.

NIO, which makes electric sport-utility vehicles such as its seven-seater flagship model ES8, has taken a different path to a listing compared to its two main competitors. Both Xpeng and Li Auto have sought a listing through the sale of new shares, raising US$2.1 billion and US$1.7 billion last June and August, respectively, through initial public offerings.

Founded in 2014, NIO said in a prospectus filed to the Hong Kong bourse on Monday that it started generating a positive cash flow in 2020 and the nine months of 2021. It further disclosed that it had also applied for a listing in Singapore, also by way of introduction.

Chinese EV start-up NIO seeks quicker secondary listing in Hong Kong via introduction, skips fundraising

Companies that seek a listing by introduction are able to do so because their existing shares are already widely held Shanghai-based carmaker has applied for a listing by way of introduction in Singapore as well

Companies that seek a listing by introduction are able to do so because their existing shares are already widely held

Shanghai-based carmaker has applied for a listing by way of introduction in Singapore as well