The trade war between China and the USA has not paused during the on-going pandemic. Actually, it’s quite the opposite. The Chinese EV start-up, Li Auto even took the opportunity to raise an IPO of $1.1 Billion. The IPO has been filed on Nasdaq at a price of $11.50 per share, putting the share at the higher end of the market.
The company’s share sale is also paired with a private placement of a total of $380 Million for the existing shareholders which include Meituan-Dianping, a giant mainland online food delivery, and Beijing-based owner of TikTok, ByteDance Ltd.
“Hillhouse Capital also has indicated an interest in buying as much as $300 million worth of shares in the offering at the IPO price.”
Big investment banks like Morgan Stanley, Goldman Sachs Group Inc., China International Capital Corporation and UBS are managing the offering and are the main book-runner for the deal.
The Chinese start-up has already delivered it’s ten-thousandth Ideal One, which has been a market best-seller in China and “the absolute leader in China’s new energy medium and large SUV market,” states the China Automotive Data Terminal. The vehicle is integrated with four-screen voice interaction, standard assisted safety features, six-seater, and seven-seater comfortable interior. It can even go from 0 km/h to 100 km/h. in about 6.5 seconds.
Xiang Li, the founder of Li Auto, was also the founder of the car internet platform, Autohome, which has a market capitalization of over $ 10 Billion on the New York Stock Exchange. This market cap gave Li Auto investors more confidence to invest in yet another Xiang Li venture.
It will be interesting to watch how five-year-old Li Auto keeps up with seventeen-year-old Tesla in the EV spectrum, where Tesla is beating many of the established players like Hyundai Motors, Toyota Motors, and Volkswagen. “Li Auto plans to use proceeds from the share sale to develop manufacturing facilities, research and development of new products, and as working capital,” as stated by South China Morning Post.
The IPO was launched at $11.50 on Wednesday and had an escalation in price by 43.13% resulting in the price of $16.46 on Thursday.
