IPO Buzz | Chinese EV startup Nio pursues secondary listing in Hong Kong and Singapore

U.S.-listed Chinese EV maker Nio announced on Monday that it set to offer its shares for trading in Hong Kong on March 10 by way of introduction, which means a portion of existing shares will be available for trading in Hong Kong.

Nio said it also applied for a “way of introduction” listing on the main board of the Singapore Stock Exchange.The electric vehicle company said it has no plans to make the Singapore and Hong Kong-listed shares exchangeable.

Nio said the Class A shares are due to start trading on March 10 in Hong Kong under the code 9866 once it receives final approval from the stock exchange.

Morgan Stanley, Credit Suisse and CICC are the joint sponsors of the deal.

Stock exchange filings on Monday showed the New York-listed firm had received preliminary approval from the Hong Kong Stock Exchange to trade its shares in the city, while the Singapore Exchange was reviewing an application for a secondary listing on the main bourse of that board.

Listing by introduction is a way of listing shares already in issue on another exchange.

Unlike a typical initial public offering (IPO) or secondary listing, companies listing stock by introduction raise no capital and issue no new shares. No marketing arrangement is required as the shares for which listing is sought are already widely held.

The mechanism was popular among companies in the past looking to build a brand in Hong Kong and the rest of Greater China.

EV start-up Nio, founded in 2014, designs, develops, jointly manufactures, and sells premium smart electric vehicles. It also devoted to develop autonomous driving, digital technologies, electric powertrains and batteries.

The Shanghai-based EV maker, along with Guangzhou-headquartered Xpeng and Beijing-based Li Auto, are the three mainland Chinese smart EV firms snapping at Tesla’s heels in China’s domestic market.

The NIO ES6, EC6 and ES8 were the top three premium battery electric SUVs as measured by sales volume in China in the first nine months of 2021, according to Frost & Sullivan.

For the nine months ended September 2021, Nio reported a net loss attributable to shareholders of 8.6 billion yuan (US$1.3 billion), widening from 4 billion yuan in the same period a year ago.

Bin Li, co-founder and CEO, owns 10.6% of NIO and is its largest single shareholder. Chinese social media giant Tencent Holdings owns a 9.8 % stake, according to the prospectus.

Global electric vehicle market continues to experience high growth. China is the clear leader in the global BEV market.

China isthe largest battery electric vehicle, or BEV, market in the world, with sales of 1.0 million units in 2020, and continues to account for more than half of global BEV sales.China’s BEV sales are expected to grow at a CAGR of 43.9% from 2020 to 2025, reaching 6.2 million units, according to Frost & Sullivan.

China is also the world’s largest passenger vehicle market, with BEV penetration rate expected to increase from 5.0% in 2020 to 26.2% in 2025.