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Chinese electric vehicle maker NIO has filed for a secondary listing of its Class A ordinary shares by way of introduction on the main board of the Hong Kong Stock Exchange, according to a filing on Monday morning.
NIO has received a letter of in-principle approval to the listing application from the Hong Kong Stock Exchange on February 28, 2022 for the listing. The shares are expected to start trading on March 10, 2022 under the stock code of 9866.
Unlike a typical initial public offering (IPO) or secondary listing, companies listing stock by introduction in Hong Kong raise no capital and issue no new shares.
The mechanism was popular among companies in the past looking to build a brand in Hong Kong and the rest of Greater China.
According to a note from Deutsche Bank on Monday, the overhang over NIO’s delisting from the US should largely be gone now and the focus will shift to the expected ramp-up of production of three new models starting in late March.
The listing will not raise additional capital, meaning no dilution, and instead will use a listing by way of introduction approach in which NIO and Tencent will lend 41.4 million shares to a designated dealer to facilitate initial trading, the note said.
Over time, NIO expects a significant number of existing holders to naturally convert their ADRs into H shares, the note said.
NIO has also applied for a secondary listing on the main board of Singapore Exchange and said the application was being reviewed by the bourse.
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