IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

XPeng IPO Initiation: Charging up for a Long Ride

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a> is a leading BEV (battery electric passenger vehicle) company in China. XPeng current vehicle line-up consists of an SUV (the G3 which commenced deliveries in December 2018) and a four-door sports sedan (the P7 which commenced deliveries in May 2020). XPeng had a market share of 2.0% in the China NEV (new energy passenger vehicles) market and 4.7% in the mid- to high-end segment of the China NEV market in 2020, according to IHS Markit. </p><p>XPeng has launched an HKEx secondary listing by offering 85 million new Class A ordinary shares. At the maximum offer price of HK$180.00 per share, the gross proceeds will be $2.0 billion. The secondary listing comes on the back of a listing on the NYSE in August 2020 ($1.4 billion net raise at $15.00 per ADS) as well as a follow-on offering in December 2020 ($2.5 billion gross raise at $45.00 per ADS).</p><div class="content-highlight"><p>Despite rising competition, XPeng is delivering on its IPO promise by growing market share, enhancing the model line up and delivering a positive gross margin trajectory. XPeng is also further solidifying its brand recognition and leadership of full-stack in-house developed autonomous driving solutions. On balance, for investors seeking exposure to the China NEV sector, XPeng’s fundamentals and valuation are attractive, in our view. </p></div>

Xpeng (XPEV US) is a leading BEV (battery electric passenger vehicle) company in China. XPeng current vehicle line-up consists of an SUV (the G3 which commenced deliveries in December 2018) and a four-door sports sedan (the P7 which commenced deliveries in May 2020). XPeng had a market share of 2.0% in the China NEV (new energy passenger vehicles) market and 4.7% in the mid- to high-end segment of the China NEV market in 2020, according to IHS Markit. XPeng has launched an HKEx secondary listing by offering 85 million new Class A ordinary shares. At the maximum offer price of HK$180.00 per share, the gross proceeds will be $2.0 billion. The secondary listing comes on the back of a listing on the NYSE in August 2020 ($1.4 billion net raise at $15.00 per ADS) as well as a follow-on offering in December 2020 ($2.5 billion gross raise at $45.00 per ADS).Despite rising competition, XPeng is delivering on its IPO promise by growing market share, enhancing the model line up and delivering a positive gross margin trajectory. XPeng is also further solidifying its brand recognition and leadership of full-stack in-house developed autonomous driving solutions. On balance, for investors seeking exposure to the China NEV sector, XPeng’s fundamentals and valuation are attractive, in our view. 

Xpeng Secondary Listing: The Battle to Rule the Teslaverse