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NIO goes public in Singapore, will other new forces follow?

Publish Date: 2022.05.21

  On May 20, which was supposed to be Valentine's Day, which was spontaneously raised by hundreds of millions of netizens in China, or a coincidence, NIO officially rang the bell on the Singapore Exchange on this day. So far, NIO has become the world's first Chinese company listed in the United States, Hong Kong, and Singapore.


  Image source: Weilai Automobile


  As a new car-making force, NIO was able to successfully list in the three places. Some people believe that this is not only the capital market's optimism for China's smart electric vehicle market, but also the recognition of NIO's strength.


  Hedging the risk of financing in US stocks


  In fact, before NIO’s official listing in Singapore, the US Securities and Exchange Commission (SEC) added 88 Chinese concept stocks including NIO to the pre-delisting list in early May. The companies are required to file their defenses by May 25. Companies on the delisting list will be at risk of delisting after disclosing their 2023 annual reports (early 2024) if it is determined that the companies on the delisting list have not filed or have filed documents that do not meet SEC requirements.


  In response, Weilai also responded, saying that Weilai has been actively exploring possible solutions, will continue to comply with applicable laws and regulations in China and the United States, and is committed to complying with applicable listing rules to maintain its listing on the New York Stock Exchange and the Hong Kong Stock Exchange. listing status.


  In September 2018, NIO was officially listed in the United States, becoming the first domestic new car company to successfully IPO on the New York Stock Exchange. In nearly four years, NIO’s share price has roughly tripled, but its share price performance has been on a downward slope since last year.


  On March 10 this year, NIO was listed on the Hong Kong Stock Exchange by way of introduction, and on May 20, it was listed on the Singapore Exchange by way of introduction. It is reported that the introduction of listing is a way for the issued securities to apply for listing. It does not need to issue new shares or sell shares held by existing shareholders at the time of listing, and does not involve financing. This means that NIO's ADSs will continue to be listed and traded primarily on the New York Stock Exchange, and Class A shares listed on the SGX can be fully converted to their ADSs listed on the New York Stock Exchange.


  Some analysts believe that the simultaneous listing of NIO in three places can further expand overseas financing channels and attract international capital. At the same time, it is also to hedge against financing risks and geopolitical risks that may be faced in US stocks.


  At present, NIO is still operating at a loss. Its 2021 financial report shows that NIO's annual revenue is 36.14 billion yuan, a year-on-year increase of 122.3%; R&D expenditure is 4.59 billion yuan, an increase of 84.6% year-on-year, and a net loss of 4.02 billion yuan, a year-on-year increase. Narrowed by 24.3%; cash reserves were 55.4 billion yuan.


  NIO opens the door for electric car companies to go public in Singapore


  In recent years, my country's auto companies have mainly chosen to list on A-shares and Hong Kong stocks, and new car-making forces have chosen the US stocks first. However, NIO is the first to list in Singapore.


  At the listing ceremony of NIO in Singapore, SGX Group CEO Luo Wencai said, "NIO is the first electric vehicle company to be listed on SGX, and its listing undoubtedly occupies the right time and place. Singapore is an international financial and financing company. The center is also an ideal starting point for NIO to enter the Southeast Asian market.”


  The reason for choosing to list in Singapore, Li Bin, the founder and chairman of NIO, said that listing in Singapore is of great significance to NIO's global business development plan. With Singapore's important strategic position in the global capital market, NIO has further improved the layout of the global capital market. Not only that, NIO will also take advantage of Singapore's international economic and technology center to carry out in-depth cooperation with local scientific research institutions in Singapore, and establish an artificial intelligence and autonomous driving R&D center in Singapore to further improve NIO's global R&D and business layout.


  Perhaps, the significance of NIO's listing in Singapore is more than that. As mentioned above, it is not impossible for NIO to enter the Southeast Asian market in the future. It is understood that in recent years, the GDP of Southeast Asia has grown rapidly, and the growth rate ranks among the top in the world. The automobile market in Southeast Asia is also one of the regions with the fastest growth in global automobile sales. With the advent of the global electrification trend, the electric vehicle market in Southeast Asia has ushered in development opportunities. According to the International Renewable Energy Agency, sales of new energy vehicles in Southeast Asia will increase to 10 million by 2025.


  In addition, many ASEAN countries have launched a series of policies to promote vehicle replacement and infrastructure construction. Driven by market demand and policies, the new energy vehicle market in Southeast Asia will usher in a blue ocean within 3-5 years. Under such a trend, as a new energy vehicle company listed in Singapore, NIO may benefit from the local capital market in the future.


  Weilai is the first electric car company listed on the SGX, and there may be a second and third in the near future. After Weilai, will Ideal, Xiaopeng and other unlisted new forces follow up? focus on.


  In fact, the new car-making forces are all aiming to be listed on the Hong Kong stock market, but after the three new forces of Xiaopeng, Ideal, and Weilai were listed on the Hong Kong stock market, the Hong Kong Stock Exchange has not included new electric vehicle companies. Some analysts believe that it is unlikely that many new forces will be listed in Hong Kong stocks. Even if they are listed, the valuation margin of the company will be greatly reduced.


  After the Hong Kong stock market and the science and technology innovation board are difficult to land, perhaps, Weilai has given other new forces some new ideas.


  This article is reproduced from Gasgoo

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