China's electric vehicle maker Li Auto surges over 50% after Nasdaq debut
New York IPO backed by food delivery giant Meituan and TikTok owner Bytedance
Bengaluru — Li Auto's stock soared over 50% after its debut on Nasdaq on Thursday, after the Chinese electric vehicle maker sold shares to investors in its $1.1bn initial public offering (IPO) for a higher-than-expected price.
The offering of 95-million American depositary shares (ADS) was priced at $11.50 per share. The stock opened at $15.50 and extended gains to rise as much as $17.50, adding to the growing list of strong debuts in 2020.
The New York IPO of Li Auto, backed by food delivery giant Meituan Dianping and TikTok owner Bytedance, comes at a time when US-listed Chinese companies are facing tightened scrutiny and strict audit requirements from US regulators, as tensions escalate between the two countries.
Sentiment towards Chinese firms among US investors has also been hit by the fallout from Luckin Coffee, a Chinese coffee chain, which was listed on Nasdaq and earlier this year disclosed that some of its employees fabricated sales accounts.
The IPO of the five-year-old Beijing-based carmaker, two years after Chinese peer Nio went public in New York, is one of the biggest US listings by a Chinese company this year. Investors value the company at about $10bn.
Unlike rival Tesla and Nio's pure battery electric vehicles, Li Auto's sport-utility vehicle model Li One allows drivers to charge their cars with electricity or switch to a petrol auxiliary power unit, a technology called extended range electric vehicle (EREV).
“There is demand for EREV, which alleviates range anxiety issues for customers,” said Mingming Huang, founder of Future Capital Discovery Fund, which was the first investor in Li Auto when the company started in 2015.
Huang also said Li Auto would not rule out the possibility of having a different power train in future models. Li Auto sold 9,666 vehicles in the first six months of 2020.
Goldman Sachs, Morgan Stanley, UBS and CICC were among the underwriters for the IPO.
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