SINGAPORE - Chinese electric vehicle (EV) maker NIO has received a conditional nod from the Singapore Exchange (SGX) for a secondary listing of its shares that will represent the American depositary shares (ADS) already issued in New York.
NIO said in a statement it received the conditional eligibility-to-list letter (ETL) from the SGX on Thursday (May 5), and that it aims to complete listing requirements by the end of the month.
The proposed mainboard listing in Singapore follows a similar move by NIO in Hong Kong earlier this year, referred to as "listing by way of introduction".
This allows investors to trade fully interchangeable shares that are already trading on another exchange.
While the company will need to comply with all the usual requirements of an initial public offering (IPO), it will not raise any funds via new share sales.
The company said that it will list in Singapore its Class A ordinary shares, with a par value of US$0.00025 per share. The company's ADS will continue to be primarily listed and traded on the New York Stock Exchange, it added.
NIO is seen as a credible challenger to BYD and Tesla, currently the dominant players in the Chinese EV market.
SGX issued the ETL after the company was provisionally identified by the US Securities and Exchange Commission (SEC) under the Holding Companies Accountable Act (HCAA) on May 4.
HCAA is a line-up of US-listed Chinese companies that face delisting if they fail to comply with SEC's auditing requirements within the next three years.
In a statement on Thursday, NIO said it continues to comply with applicable laws and regulations in both China and the US, and will strive to maintain its listing status on both the NYSE and the Hong Kong Stock Exchange.
There are more than 200 Chinese firms listed in the US as ADS, with a combined market capitalisation of US$2.1 trillion (S$2.9 trillion). Nearly half of them are now in the cross hairs of the HCAA that was legislated in 2020.
While NIO reported a loss of US$348 million attributable to its shareholders for the full year 2021, its cash balance stood at US$8.7 billion, which is seen as enough to fund future growth in an expanding market.
According to the J.D. Power 2021 China New-Vehicle Intender Study, more than 60 per cent of Chinese consumers and nearly one-fourth of Generation Z shoppers intend to buy a new energy vehicle.
China's EV industry has also managed to stay clear of the regulatory crackdown that was suffered by technology giants in the past two years. EVs represent a major plank of the country's net-zero carbon emissions drive.
NIO is set to launch three new models this year, hoping to cash in on the potential surge in demand for EVs in the second half of 2022, when supply-chain issues due to China's zero-Covid-19 policies are likely to have subsided.