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A Li Xiang One hybrid SUV is on display at the 18th Guangzhou International Automobile Exhibition at the China Import and Export Fair Complex on November 23, 2020 in China.
Li Zhihao | China Visual Group | Getty Images
GUANGZHOU, China – Shares of Li Auto in Hong Kong had a moderate trading start on Thursday.
The Nasdaq-listed electric car maker sold shares for HK $ 118 each, which helped the company raise HK $ 11.6 billion ($ 1.49 billion).
Li Auto followed rival Xpeng in fundraising in Hong Kong via a so-called double primary list. This means that it will be subject to the rules and oversight of US and Hong Kong regulators, which is not the case with a secondary listing.
If a company is listed in two places, the shares of each exchange tend to follow each other closely. Li Auto’s US-listed shares closed up 1% on Wednesday. Hong Kong-listed stocks were down slightly amid the broader decline in Asian markets on Thursday.
Li Auto currently has one model on the market, an SUV which she calls Li One. Its competitors such as Nio and Xpeng both have more cars available to consumers.
Li Auto is trying to capitalize on investor enthusiasm around the electric vehicle space by raising funds, but it could also try to hedge against geopolitical risk as US-China tensions continue.
Earlier this year, the United States Securities and Exchange Commission passed rules that impose more stringent audit requirements on foreign companies listed in the United States. Businesses that break the rules could be delisted.
Li Auto said it will use the proceeds from the Hong Kong listing in various areas, including launching new models, expanding production capacity and opening more retail stores.
Correction: This story has been updated to correctly reflect the performance of Li Auto’s US-listed stocks during Wednesday’s session.
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