Friday, January 21, 2022

XPeng president says threat of US Xpeng ADR Stock delisting still ‘several years away’

Shares of Chinese electric vehicle companies have fallen sharply because of investor concerns about the risk of delisting the ADRs of US-listed Chinese companies. But according to XPeng Motors’ CEO, this is not an imminent threat.

XPeng is “following closely” the furor surrounding US-traded Chinese technology companies, although the threat of forced delisting from US exchanges is still “several years away,” the company’s president, Brian Gu, said in an interview with Bloomberg on Tuesday.

With the US Securities and Exchange Commission passing amendments to finalize rules implementing the Holding Foreign Company Accountability Act (HFCAA), stocks of Chinese electric vehicle companies listed there suffered sharp declines last week. Xpeng Stock is up 8% YTD.

Xpeng Stock

In a research note sent to investors Monday, Deutsche Bank’s Edison Yu’s team said the market is clearly signaling that the opportunity is much greater now than it was a week ago, but that the law is not a new development and that stocks generally shrug off the news after each “new cycle”.

NIO is currently in a less favorable position because it doesn’t have a dual primary listing in Hong Kong, which is probably why it sold the most of the three last week, the team said.

“In our view, NIO will eventually list in Hong Kong similar to XPEV/LI and this would occur much earlier than potential worse case delisting deadline,”

Nio Investors are not in a good position. Nio Stock is down 38% YTD so far

In the interview with Bloomberg, Gu also addressed the issue of access to the US market, saying that the Chinese government will be supportive of XPeng’s efforts to expand globally, however, the US market may be “difficult to tackle” in the short term.

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“We need to be fully prepared before we make that decision. If you look at the auto companies that have made an effort to go in to the US, it took decades to make it happen,” Gu said.

Hi I'm Leanne. I'm a big fan of electric cars (drive a Model 3 myself) and support the movement to go electric! I hope you enjoy my Articles here on the website.
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