Li Auto shares off to muted start in $1.5 billion Hong Kong debut
A Li Xiang One hybrid SUV is on display during the 18th Guangzhou International Automobile Exhibition at China Import and Export Fair Complex on November 23, 2020 in China.
Li Zhihao | Visual China Group | Getty Images
GUANGZHOU, China — Li Auto shares in Hong Kong were off to a muted start in their trading debut on Thursday.
The Nasdaq-listed electric carmaker sold shares at 118 Hong Kong dollars each, raising the company 11.6 billion Hong Kong dollars ($1.49 billion).
Li Auto has followed rival Xpeng in raising money in Hong Kong via a so-called dual primary listing. That means it will be subject to the rules and oversight of both U.S. and Hong Kong regulators, which isn’t the case with a secondary listing.
If a company is listed in two locations, the shares on each stock exchange tend to closely follow each other. U.S.-listed shares of Li Auto closed 1% higher on Wednesday. Hong Kong-listed shares were slightly lower amid a broader dip in Asian markets Thursday.
Li Auto currently has one model on the market, an SUV it calls Li One. Its rivals such as Nio and Xpeng both have more cars available to consumers.
Li Auto is trying to take advantage of investors’ excitement around the electric vehicle space by raising money, but it could also be trying to hedge against geopolitical risk as U.S.-China tensions continue.
Earlier this year, the U.S. Securities and Exchange Commission adopted rules that impose stricter auditing requirements for foreign firms listed in the U.S. Companies that fall afoul of the rules could be delisted.
Li Auto said it will use the proceeds of the Hong Kong listing in various areas including launching new models, expanding production capacity and opening more retail stores.
Correction: This story has been updated to correctly reflect the performance of U.S.-listed shares of Li Auto during Wednesday’s session.
