Shares in Chinese EV maker NIO are traded in Hong Kong

NIO Inc. shares NIO,
began a secondary listing on the Hong Kong stock exchange on Thursday, becoming the latest US-listed Chinese electric-vehicle maker to offer shares closer to home amid rising geopolitical uncertainty.

Shares of the Shanghai-based company were trading at HK$161.80, roughly US$20.69, at midday. The move reflected positive investor sentiment a day after NIO’s American Depository Shares surged 12% to $20.17 amid a broad rally for tech stocks.

NIO, which listed on the New York Stock Exchange in 2018, launched shares in Hong Kong, meaning it has not issued any new shares or raised new funds in the offering.

That decision was likely due to less-than-ideal market conditions as NIO waits for a better time to raise money by issuing new shares, said Bo Pei, a research analyst at US Tiger Securities. He pointed out that US-listed rivals Li Auto Inc. and Xpeng Inc. completed secondary listings in Hong Kong last summer when better market conditions allowed them to use higher valuations to raise capital.

NIO stocks resonated with investors early in the pandemic but came under pressure as Beijing and Washington took a closer look at US-listed Chinese companies, with EV and other growth stocks trading at a time of reduced risk appetite and concerns about a inflation fell.

NIO’s US-listed depositary receipts are down 51% over the past 12 months, including a 36% drop so far in 2022.

HSBC has a Buy rating and a price target of $23.96 on NIO’s US stock. A report last month said NIO is likely to expand its market share on the back of three new premium EV models it will launch this year and improvements in autonomous driving capabilities. Shares in Chinese EV maker NIO are traded in Hong Kong

Brian Lowry

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