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Xpeng (XPEV), the manufacturer of luxury electric vehicles, has become the latest in a growing litany of Chinese EV players that are opting for a U.S. listing. While the company filed the initial Form F-1 with the U.S. Securities and Exchange Commission (SEC) on the 10th of August, today’s amended filing reveals granular details regarding the upcoming IPO.
As a refresher, the original Form F-1 filed by Xpeng registered 429.84 million class B common shares for an IPO on the New York Stock Exchange (NYSE). Today’s filing, however, has registered 85 million American Depositary Shares (ADS) that represent 170 million class A shares:
“We are offering 85,000,000 ADSs. Each ADS represents two Class A ordinary shares, US$0.00001 par value per share. We anticipate the initial public offering price per ADS will be between US$11.00 and US$13.00.”
Moreover, the deal underwriters have an option to purchase 12.75 million additional ADS within 30 days, if required.
Crucially, Xpeng has revealed the total quantum of shares that it plans to offer:
“Upon the completion of this offering, 801,554,400 Class A ordinary shares, 429,846,136 Class B ordinary shares and 178,618,464 Class C ordinary shares will be issued and outstanding. Holders of Class A ordinary shares, Class B ordinary shares, and Class C ordinary shares will have the same rights except for voting and conversion rights. Each Class A ordinary share will be entitled to one vote, and each Class B ordinary share will be entitled to 10 votes and each Class C ordinary share will be entitled to five votes. Each Class B ordinary share or Class C ordinary share will be convertible to one Class A ordinary share at any time by the holder thereof.”
In total, Xpeng expects to rake in over $1 billion in IPO proceeds. As a refresher, American Depositary Shares (ADS) are U.S. dollar-denominated equity shares of a foreign company that can be purchased on an American stock exchange. A company listing ADS on a major American stock exchange has to adhere to the U.S. GAAP along with the same stringent level of reporting as that applicable to local companies.
Xpeng’s NYSE IPO will not be its first major capital raising exercise in recent times. As an illustration, the company raised an aggregate amount of $900 million through two funding tranches in July. In today’s filing, the company has noted:
“Four of our existing shareholders, Alibaba, Coatue, Qatar Investment Authority, and Xiaomi, and/or their affiliates have indicated interest in purchasing up to US$200 million, US$100 million, US$50 million and US$50 million, respectively, of the ADSs being offered in this offering at the initial public offering price and on the same terms as the other ADSs being offered. In addition, PRIMECAP Management Company and/or its affiliate have indicated interest in purchasing up to US$100 million of the ADSs being offered in this offering at the initial public offering price and on the same terms as the other ADSs being offered.”
Upon the completion of its IPO, Xpeng is expected to trade on the NYSE under the symbol XPEV. The company is currently selling two EV models – the G3 SUV and the P7 sedan. The company also plans to launch a new sedan in 2021. As of the 31st of July, Xpeng sold 18,741 units of the G3 SUV and 1,966 units of the P7 sedan. After factoring in subsidies, the G3 retails for less than $30,000, allowing the model to compete with the likes of Tesla's (NASDAQ:TSLA) Model 3 as well as NIO’s (NYSE:NIO) offerings. As far as Xpeng’s financials are concerned, the company reported $141.9 million in revenue and -$0.81 in EPS for the first half of 2020.