Chinese EV maker Nio starts trading on SGX

The stock opened at US$16.90 on SGX and rose as high as US$20.28 in early trading. PHOTO: REUTERS

HONG KONG (BLOOMBERG) - Chinese electric car maker Nio debuted on the Singapore Exchange (SGX) on Friday (May 20) without raising funds, giving investors a third venue to trade its shares after New York and Hong Kong.

The stock opened at US$16.90 on SGX and rose as high as US$20.28 in early trading. It entered the midday break at US$17.20, up 1.8 per cent from its opening price.

Nio opted for a listing by way of introduction, meaning it did not go through a traditional initial public offering (IPO) process and did not raise proceeds.

The Singapore secondary shares are fully fungible with the American ones listed on the New York Stock Exchange.

The Chinese electric vehicle (EV) maker joins a slew of companies already traded elsewhere that opted to list in Asia through a mechanism that is quicker and cheaper than an IPO. Having shares available in Hong Kong and Singapore gives the company a hedge against the risk of being delisted stateside due to regulatory issues.

Nio said on May 5 it would strive to maintain its listing status in the United States and Hong Kong, after disclosing that the company has been provisionally identified by the US Securities and Exchange Commission under the Holding Foreign Companies Accountable Act.

Founded in 2014, the company has joined the EV race with a product line-up targeting middle-class consumers, offering customer-centric services and an innovative battery-swopping model. Like its peers, Nio has faced challenges from higher raw material prices and supply chain disruptions during the Covid-19 outbreak.

It temporarily suspended manufacturing in April as its suppliers in Jilin, Shanghai, and Jiangsu were forced to halt production or postpone shipments due to logistical issues.

Nio's US-listed American depository receipts are down 47 per cent this year, while the shares in Hong Kong have dropped 22 per cent since their first day of trade on March 10.

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