Chinese EV maker XPeng looks to raise up to $1.11b in US IPO

FILE PHOTO: A woman walks by an Xpeng Motors showroom at its headquarters in Guangzhou, Guangdong province, China May 18, 2020. REUTERS/Yilei Sun

Chinese electric vehicle (EV) manufacturer XPeng Inc said it hopes to raise up to $1.11 billion in its initial public offering (IPO) in New York, seeking to ride the enthusiasm for EVs even as U.S.-China relations remain strained.

The company said on Friday it intends to sell 85 million shares American depositary share (ADS), each representing two Class A ordinary share, priced between $11 and $13 per share.

At the top end of the range, XPeng’s valuation stood at $9.17 billion.

The IPO comes at a time when U.S.-listed Chinese companies are facing tightened scrutiny and strict audit requirements from U.S. regulators, as tensions escalate between two of the world’s biggest economies.

The Chinese EV maker said existing investors Alibaba Group, Coatue, and Qatar Investment Authority had indicated an interest in buying up to $200 million, $100 million and $50 million, respectively, of the ADSs being offered.

Backer Xiaomi Corp <1810.HK> had also indicated an interest in buying up to $50 million of the ADSs.

Alibaba will own all of XPeng’s class C ordinary shares, representing 14.9% of the voting power of its total shares immediately after the completion of the offering, XPeng said.

XPeng’s IPO comes after rival Li Auto Inc, another Chinese electric vehicle startup, raised $1.09 billion in its IPO on Nasdaq last month.

Share prices of EV makers including Tesla Inc and Nio Inc have surged in recent months.

“Investors can’t seem to get enough exposure to electric vehicle stocks. We are comparing Xpeng with Li Auto, which went public in July and is up 28% from its IPO and to Nio,” Kathleen Smith, Principal, Renaissance Capital, provider of institutional research and IPO ETFs, said.

Founded in 2014, Guangzhou-based XPeng delivered its first Xpeng G3 vehicle to customers in December 2018 and launched a second model in April this year. The company manufactures cars in two factories in China.

BofA Securities, JP Morgan and Credit Suisse are among the underwriters for the IPO.

Reuters

Singapore Reporter/s

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.