Chinese EV maker Xpeng surges 67% on US debut, raises $1.5b in IPO

A staff member of XPeng Motors stands next to the charging station at company's booth during the media day for Shanghai auto show in Shanghai, China April 17, 2019. REUTERS/Aly Song/File Photo

Shares of Chinese electric vehicle (EV) maker Xpeng Inc jumped as much as 67% after its U.S. market debut on Thursday, as capital markets continue to reward new listings in what has been one of the best years for IPOs since the dotcom boom.

Shares of Xpeng, which counts Chinese e-commerce titan Alibaba and Xiaomi Corp among its backers, opened at $23.10 per American Depositary Share (ADS), up from the raised offer price of $15.00 per ADS.

Earlier on Thursday, Xpeng increased the size of its U.S initial public offering by more than a third to about $1.5 billion, as global investors race to back companies promoting cleaner technology.

The IPO, which is the third major listing in New York by Chinese EV companies in the past two years, comes as share prices of EV makers including Tesla Inc and Nio Inc have surged in recent months.

Companies have raised more than $70.0 billion in U.S. IPOs so far in 2020, outpacing the $62.5 billion in 2019, on track for the busiest year since 2014 and second-biggest since 2000.

Xpeng‘s Chief Executive Officer He Xiaopeng, 42, who is also known for founding internet browser company UCWeb, said the company will focus on cars priced between 150,000 yuan ($21,804) to 300,000 yuan, a big mass-market segment in China, the world’s biggest auto market.

“In the past three months investors stopped questioning whether future cars will be electric and smart. They think the trend is inevitable,” He said.

Xpeng will use the funds for research and development, and to expand sales, He told Reuters.

The firm invested over 2 billion yuan in technology development last year, with around one-third on intelligent functions such as autonomous driving, He added.

Xpeng has sold over 20,000 electric vehicles, including new P7 sedans and G3 sport utility vehicles. It builds cars in two factories in China. He said a third model would also be a sedan, but declined to comment on the company’s future sales.

The company said in a filing it would price its shares at $15 each, after initially setting a price range of $11 to $13 per ADS when the deal was launched on Friday.

Xpeng had initially targeted raising $1.11 billion. Investors now value the company at over $11 billion.

There is also a so-called greenshoe option that would allow Xpeng to raise a further $224.4 million.

Reuters

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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.