Xiaopeng Is The First To Take The Lead, And "Weixiaoli" Is Collectively "Refluxing" Hong Kong Stocks?

On August 27, 2020, on the other side of the ocean, Xiaopeng automobile (NYSE: xpev) sounded the bell of IPO and gathered with Weilai automobile and ideal automobile in the United States. In less than a year, Xiaopeng automobile, the latest in weixiaoli to be listed in the United States, has taken the lead in speeding up the pace of listing in Hong Kong.

On June 24, Xiaopeng Motor announced on the Hong Kong stock exchange that it plans to sell 85 million class a common shares worldwide, including 4.25 million class a ordinary shares in Hong Kong, 80.75 million class a ordinary shares in the international market, and 15% of the over allotment shares. The offer price of Hong Kong shares will not exceed HK $180 per share under the stock code 9868. According to the Hong Kong stock issue price estimation, the IPO of Xiaopeng automobile raised about 15.3 billion Hong Kong dollars, with the highest valuation of more than 300 billion Hong Kong dollars.

According to the announcement, Xiaopeng auto will offer shares from June 25 to June 30, set an international offering price on or before June 30, and list on the main board of the stock exchange on July 7.

It is worth noting that Xiaopeng auto was listed in Hong Kong less than a year after landing in the US stock market, showing a slight anxiety. However, the new auto makers who have not yet achieved a balance of payments or even profits need more funds to survive in the fierce competition of the domestic new energy vehicle market. When the US stock market supervision is increasingly stringent, going back to Hong Kong for listing is the optimal solution to broaden financing channels and reduce financing risks.

Xiaopeng became the first double listed China capital stock in three years

On June 23, it was reported that Xiaopeng automobile had been approved by the Hong Kong stock exchange for listing, and it planned to raise $2 billion this time. According to the documents disclosed by the Hong Kong Stock Exchange on the same day, Xiaopeng automobile passed the listing hearing of the Hong Kong stock exchange, and JPMorgan Chase and Bank of America Securities were the co sponsors of the company. 21 century economic report reporter on this matter to verify, the relevant person in charge of Xiaopeng automobile said "no comment.". Some people in the industry said that Xiaopeng auto will be listed in Hong Kong stock market within two weeks. It is worth mentioning that, affected by the news, Xiaopeng Auto's US stock market rose by more than 5% before. On June 24, Xiaopeng automobile disclosed its listing announcement in the Hong Kong stock exchange.

"In general, there are three ways to return Chinese stocks to a shares or Hong Kong shares: one is to delist from the U.S. stock market and re list in A-share or Hong Kong stock market; the second is to retain the U.S. share listing status while listing in Hong Kong stock market for the second time; and the third way is to keep the listing status of us share in the United States and Hong Kong stock respectively (dual listing). Xiaopeng belongs to the third type." On June 24, a securities analyst, who did not want to be named, said, "the dual listing process is more stringent than the secondary listing and is subject to the joint supervision of the US Securities and Exchange Commission (SEC) and the Hong Kong Securities and Futures Commission (SFC). In contrast, if it is a secondary listing, the regulator of the first listing has the main regulatory power. "

Since last year, China capital stocks have chosen to go back to Hong Kong for secondary listing. In 2018, the Hong Kong Stock Exchange relaxed the rules to allow innovative Chinese capital stock companies to be listed in Hong Kong for the second time, but they must meet some "hard" requirements, including that the issuer must be an innovative enterprise and meet the conditions that the market value at the time of listing must be at least HK $40 billion, or the market value at the time of listing is at least HK $10 billion, and the income of the latest audited accounting year is at least HK $1 billion; Second, the company must have a good regulatory compliance record of at least two years on another eligible exchange.

It is worth noting that due to the short time interval between Xiaopeng automobile and the previous US stock listing, the IPO of Xiaopeng automobile in Hong Kong is not a secondary listing, but a dual primary listing, that is, the company is listed on two stock exchanges at the same time and meets the regulatory requirements of the two places for listed companies. It is worth mentioning that after Xiaopeng Auto's official listing in Hong Kong stock exchange, it will be the largest dual major listed company on the stock exchange since the biotechnology pharmaceutical company Baiji Shenzhou raised $903 million in the Hong Kong stock exchange three years ago.

It is reported that Xiaopeng Auto's return to Hong Kong stock market in the form of "Dual Major listing" can meet the access conditions of Shanghai Hong Kong stock connect and Shenzhen Hong Kong stock connect, so as to facilitate A-share investors to invest in Hong Kong stock connect and activate stock transactions.

According to the prospectus, he Xiaopeng, chairman of Xiaopeng automobile, is the largest shareholder, with 11.9% of Taobao China, 4.8% of IDG capital, 3.8% of Xia Heng, 3.2% of Wuyuan capital and 2.8% of Jiyuan capital. Xiaopeng automobile implements a differentiated equity structure, including class A, class B and class C shares, which give the holders the right to exercise one vote, ten votes and five votes respectively. In order to meet the requirements of listing in Hong Kong, the 179 million class C shares owned by Taobao China are converted into class A ordinary shares according to the benchmark of one share for one share. Taobao China will not be able to exercise the power of appointment or removal of directors after the share exchange.

In addition, in order to meet the Hong Kong listing rules, namely, the board of directors should include at least three independent non-executive directors, representing at least one-third of the board of directors. He Tao, the co-founder and senior vice president, and Gu Hongdi, the president and honorary vice-chairman, will resign from their directorships, but their management duties remain unchanged.

"There is a lot of investment in car manufacturing and financing is needed. Listing in Hong Kong can provide more financing channels for Xiaopeng automobile, reduce risks, and further enhance R & D investment and product layout. In addition, there are fewer auto stocks listed in Hong Kong stock market at present, and Xiaopeng can also take a certain opportunity. " On June 25, automobile analyst Zhang Xiang said in an interview with the 21st century economic report reporter.

Dual listing can hedge risk

With soaring stock prices and soaring market value, Tesla, Weilai, ideality and Xiaopeng will stage a capital Carnival in 2020. After the listing of Xiaopeng automobile in the United States last year, the stock price of Xiaopeng automobile once rose from $15 / share to a maximum of $74 / share. However, since this year, the capital market has become calm, and the share price has remained depressed. As of June 24, the U.S. stock closed at US $40.95/share, and its market value fell to about US $33 billion“ Today, no enterprise has made it clear that it has got the first hand... I had a chat with Li Bin: "we are all sitting at the card table, all in the qualification competition, not to the knockout game, not yet on the card table.". Because today we are very small. " In June, he Xiaopeng, chairman of Xiaopeng automobile, said frankly in a public speech.

Indeed, although Weilai, idealized and Xiaopeng automobile have all realized the positive gross profit rate, they have not yet realized their hematopoietic capacity and are still in a state of loss. From 2018 to 2020, the revenue of Xiaopeng automobile is 9.7 million yuan, 2.321 billion yuan and 5.844 billion yuan respectively, and the net losses are 1.399 billion yuan, 3.692 billion yuan and 2.732 billion yuan respectively. In the first quarter of this year, the net loss of Xiaopeng automobile was 787 million yuan, while that of Weilai and ideal was 450 million yuan and 360 million yuan respectively.

Guoxin Securities Research Report estimates that if Weilai, Xiaopeng and ideal want to achieve profit, the sales scale needs to reach 180000, 120000 and 60000 respectively. As of May this year, the cumulative delivery scale of the three is 109500, 64000 and 51700 respectively, which is still a certain gap from the profit.

Xiaopeng automobile promises to break even by the end of 2023 or 2024. However, to achieve this goal, more deliveries, higher R & D investment and a wide range of product layout will undoubtedly be needed, and all of these will require more funds. It is reported that in addition to G3 and P7, Xiaopeng P5 launched in April this year is planned to be listed in the third quarter and delivered in the fourth quarter. According to the prospectus, Xiaopeng plans to deliver the g3i medium-term version of g3i by the end of the third quarter of 2021, and launch the fourth intelligent electric vehicle, an SUV positioned higher than P7, in 2022.

In fact, in recent years, China concept stock returns frequently, and Xiaopeng automobile is not alone. Since this year, Baidu and station B have been listed on the Hong Kong stock exchange. CITIC Securities predicts that in the next three years, the Hong Kong market will usher in the centralized return of about 40 leading China capital stocks. In addition to Xiao Peng, Wei Lai and idealist have revealed plans to go to Hong Kong for listing in the first echelon of the new car manufacturing forces.

As early as the beginning of March this year, it was reported that Weilai automobile, ideal automobile and Xiaopeng automobile, three new automobile manufacturing forces which have been listed in American stocks, are discussing with several banks to issue shares in Hong Kong. They plan to list in Hong Kong as early as this year, and the three companies will each plan to sell at least 5% of their shares. According to the market value at that time, the total proceeds from the share sales were about $5 billion. At that time, the source disclosed that Weilai contacted Credit Suisse and Morgan Stanley to prepare for listing in Hong Kong, and at the same time considered the possibility of A-share listing; Ideal, in partnership with Goldman Sachs and UBS, plans to complete its listing as early as the third quarter of this year, raising about $1 billion to $2 billion.

"Although the gross profit of new car makers is positive, the net profit has not yet turned positive, so they need financing; On the other hand, at present, the relationship between China and the United States is rather delicate. A dual listing in the capital market can hedge some risks, which is beneficial to enterprises. " On June 25, Zhang Junyi, former managing partner of Weilai capital and former global partner of Roland Berger, said in an interview with 21st century economic reporter.

"In fact, after the issuance in the open market, a financing channel has been opened for continuous financing, which is also in line with the law of market development. The automobile industry is an industry with continuous investment, which can not be invested by one or two enterprises. In addition, based on the Shanghai Hong Kong stock connect, listing in Hong Kong can also revitalize investors in a shares. "

It can be predicted that when Xiaopeng auto successfully landed in Hong Kong stock market, Weilai and ideal will also have some action.