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On November 20, 2020, in Guangzhou, Guangdong Province of China, an Xpeng P7 electric car will be on show at the 18th Guangzhou International Automobile Exhibition at China Import & Export Fair Complex. Getty Images | VCG | Visual China Group GUANGZHOU, CHINA (Xinhua) — In their Hong Kong debut, shares of Xpeng, a U.S.-listed electric car manufacturer, surged at the start before falling on Wednesday. At a price of 165 Hong Kong dollars per share, Xpeng issued 85 million Class A ordinary shares. Those shares opened 1.8 percent higher at 168 Hong Kong dollars. They dropped to 162.50 Hong Kong dollars shortly after, almost 1.5 percent below their listing price. The electric vehicle manufacturer is already listed in the United States. Chinese companies that are publicly traded on Wall Street frequently have a secondary listing in Hong Kong. When a firm that is listed on one exchange sells shares on another, this is known as cross-listing. Xpeng’s share offering, on the other hand, is a dual-primary listing. That implies it will be subject to both US and Hong Kong regulators’ laws and oversight, which is not the case with a secondary listing. Last month, the electric carmaker announced that its shares would be priced at no more than 180 Hong Kong dollars each. Xpeng raised a total of 14.02 billion Hong Kong dollars ($1.8 billion) in gross proceeds. Chinese companies that are listed in the United States have opted to list in Hong Kong as a method to mitigate tensions between China and the United States. The Securities and Exchange Commission of the United States introduced rules earlier this year that put higher auditing standards on international companies listed in the United States. Companies who fail to meet these conditions risk being delisted. “Our Hong Kong listing, I believe, was a highly strategic one. I believe that hedging against geopolitical risks is merely one of the aspects in it “Xpeng’s president, Brian Gu, told CNBC’s Emily Tan. “However, because we’re a consumer brand in China, we’d like to have a listing venue that brings us closer to home in the long run. In the end, we want our consumers to be our shareholders, and having a dual primary listing in HK (Hong Kong) will enable us to access Chinese financial markets.” However, Chinese companies listed in the United States may suffer scrutiny at home. Beijing announced on Tuesday that it will increase oversight of companies listed in other countries. The government intends to improve cross-border data security and flow rules. Days after its first public offering in the United States, officials initiated a cybersecurity assessment of ride-hailing giant Didi and compelled app retailers to withdraw it from download. In June, Xpeng, which is best known for its P7 sedan and G3 SUV, delivered 6,565 vehicles, a 617 percent rise year over year and a monthly record. The Guangzhou-based company delivered 17,398 vehicles in the second quarter, exceeding its own expectations. As competition heats up, the company released its third production model, the P5 sedan, in April. Rivals include Li Auto, Tesla, and Nio./nRead More

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