XPeng Inc. (XPEV) stock prices were down by 5.86% on July 7th, 2021, bringing the price per share down to USD$41.47 at the end of the trading day. Subsequent premarket fluctuations have seen the stock fall another 6.27%, bringing it down to USD$38.87.
EXPV Hong Kong Debut
July 7th, 2021 saw the company fall flat in its trading debut in Hong Kong, having been the first Chinese EV maker to finish a “homecoming” share sale. The share sale saw the company raise an impressive USD$1.8 billion. The shares opened at USD$21.62 and fluctuated throughout the session before ending the trading day at USD$21.24, the same as their offer price. The company went public in the U.S in August 2021 and its New York-listed shares have nearly tripled from their IPO price.
Increasing Chinese Oversight
The company’s Hong Kong debut followed increases in Chinese regulations as the country cracks down on the technology industry, dealing a massive blow to both global investors and local companies hoping to be listed abroad. July 6th, 2021 saw the Chinese State Council vow to further increase oversight of data security and overseas listings.
Future of EV Space in China
With the Chinese regulatory probe into Didi Chuxing recently, the electric vehicle manufacturing space is concerned about the future of the gathering and analytics of vehicle operating data, which was expected to be the next big source of companies’ profits. Stricter government oversight has also resulted in the scaring off of global investors. Shares of Chinese EV manufacturers that are listed in the U.S. have rallied since their lows in mid-May 2021, based on promising demand growth. XPEV is the first of a total of three U.S-listed Chinese EV makers to launch a homecoming sale. Nio and Li Auto are planning to follow suit with listings in Hong Kong.
Promising Developments
Despite the company not having yet turned a profit, revenue has been increasing. With the company forecasting profitability by late 2023 or early 2024, revenues have reached USD$455 million in the first quarter of 2021. Deliveries for June 2021 were up a staggering 617% as compared to numbers from the same month of the prior year.
Future Outlook for EXPV
As the company expands its investor base closer to home, it is keen for its consumers to also be its stockholders. XPEV is poised to ride the wave of increased Chinese regulations, with strategies to come out stronger than ever. Investors are hopeful that the company will not be hit too hard by the increasing oversight and that this will not affect its listings abroad.
