Shares of Chinese electric vehicle maker Xpeng Inc closed flat in their Hong Kong debut on Wednesday.
Chinese companies listed on Wall Street get to do what’s known as a secondary listing, usually in Hong Kong. A secondary listing is when a company already has a main listing location and then goes on to sell shares on another exchange.
But Xpeng’s share offering is an unusual one as it is a dual-primary listing. What this means is that it will be subject to the rules and oversight of both U.S. and Hong Kong regulators, which doesn’t apply in a secondary listing. The electric vehicle maker is already listed in the U.S.
Xpeng’s shares opened at 168 Hong Kong dollars, a 1.8% rise. Shortly after the shares dropped to be 3.5% below the offer price, but recovered and ended the day flat at 165 Hong Kong dollars
Xpeng said it will use the proceeds from the Hong Kong listing to expand its products and develop more advanced technologies, as well as marketing and expanded manufacturing.
The company also said that it would develop future models based on product platforms designed for international markets.
According to Brian Gu, President of Xpeng, the company’s listing on Honk Kong is a strategic one. Xpeng, being a US-listed Chinese company, presumably took this move as an attempt to hedge against tensions between China and the United States. The company would also like to have a listing venue that brings them closer to China, according to Brian Gu; and having the dual primary listing status in HK (Hong Kong) gives Xpeng eligibility to be connected to Chinese capital markets.
Xpeng is a consumer brand in China but this does not make it ultimately safe in its home country. U.S-listed Chinese firms could also face scrutiny in China.
The Chinese government has stated that it will augment its supervision of companies listed abroad. The plan is to step up rules around cross-border data flows and security. The move comes after regulators launched a cybersecurity review into ride-hailing company Didi and forced app stores to remove it from download, days after its U.S. initial public offering.
Xpeng delivered 6,565 vehicles in June alone; a 617% increase year-on-year, and 17,398 vehicles in the second quarter of the year.
Xpeng is based in Guangzhou and is known for its P7 sedan and G3 SUV. In April, the electric vehicle maker launched the P5 sedan vehicle; its third production model which features so-called Lidar technology, bringing another model to the electric car stratosphere, as it continues to compete against rivals including Li Auto, NIO, and Tesla.