A Li Xiang One Hybrid SUV can be seen during the 18th Guangzhou International Automobile Exhibition at the China Import and Export Fair Complex on November 23, 2020 in China.
Li Zhihao | Visual China Group | Getty Images
GUANGZHOU, China – Li Auto shares in Hong Kong started their trading debut on Thursday.
The Nasdaq-listed electric car maker sold shares for $ 118 Hong Kong each, bringing in Hong Kong $ 11.6 billion ($ 1.49 billion) for the company.
Li Auto has followed rival Xpeng in raising money in Hong Kong via what is known as a dual primary listing. This means that it is subject to the rules and supervision of both the US and Hong Kong regulators, which is not the case with a secondary listing.
When a company is listed in two locations, stocks tend to follow one another closely on each exchange. Li Auto’s US-listed shares closed 1% higher on Wednesday. Hong Kong-listed stocks were slightly lower on Thursday amid a wider slump in Asian markets.
Li Auto currently has one model on the market, an SUV called the Li One. Its competitors like Nio and Xpeng both have more cars available for consumers.
Li Auto is trying to capitalize on investor enthusiasm for the electric vehicle space by raising money, but it could also try to hedge against geopolitical risk as US-China tensions persist.
Earlier this year, the US Securities and Exchange Commission issued regulations that impose stricter auditing requirements for foreign companies listed in the US. Companies that violate the regulations can be removed from the stock exchange.
Li Auto said it will use the proceeds from the Hong Kong listing in a variety of ways, including introducing new models, expanding manufacturing capacity and opening more retail stores.
Correction: This story has been updated to accurately reflect the performance of US-listed Li Auto shares during Wednesday’s session.