Shares in Chinese electric carmaker Li Auto fell on its Hong Kong debut on Thursday, with investors increasingly jittery over Beijing’s regulatory clampdown on tech companies and other industries.
The listing is the first to gauge investor sentiment after China’s regulatory crackdown on overseas listings. That turned ride-hailing giant Didi Global’s June listing in the US into a fiasco, triggering class action lawsuits as it was accused of failing to properly disclose imminent regulatory action ahead of the $4.4 billion IPO.
Li, which is a mainland rival to US titan Tesla, is the second Chinese electric vehicle maker already traded on Wall Street to list in Hong Kong as a hedge against regulatory risks amid China-US tensions. Its domestic rival XPeng had an IPO last month. The company is considering issuing A-shares in China, President Shen Yannan said.
Companies are flocking to the financial hub to guard against the risk of being removed from US exchanges over a standoff on auditing or disclosure demands. The firm raised $1.5 billion in the IPO but on Thursday its shares slipped to HK$116.80 in early trade, 2.1% down from its IPO price of HK$118.
The offering also comes during a turbulent period for stocks as investors grow increasingly jittery over Beijing’s tightening grip, including the imposition of a sweeping national security law last year.
Also on AF: Li Auto to Test Global Demand for Chinese Share Sales After Didi Fiasco
Li Auto plans to dedicate almost half of its net proceeds to research and development including in “ultra-fast charging technologies” and efforts in “intelligent vehicle and autonomous driving technologies”, according to its prospectus.
The carmaker is also planning an overseas production facility to boost its sales worldwide, the South China Morning Post reported. China is the world’s largest car market and Beijing expects new energy vehicles to comprise 25% percent of car sales by 2025.
• AFP and Jim Pollard
ALSO SEE:
June sales of Nio, Xpeng break records with chip shortage relief in sight
