Automotive company Chery aims for a $1.2 billion fundraising through a stock market listing in Hong Kong.
Chery Automobile, a prominent Chinese car manufacturer founded in 1997, has announced plans for an initial public offering (IPO) in Hong Kong. The company aims to raise up to HK$9.14bn ($1.17bn) to fuel its expansion, research and development, and international market growth.
The IPO will see Chery issue 297.4 million shares, with the pricing set between HK$27.75 and HK$30.75. The final share price is anticipated to be disclosed on September 23.
Chery currently operates five brands - Chery, Jetour, Exeed, Icar, and Luxeed. The company has garnered interest from over ten investors, including JSC International Investment Fund and the Hillhouse Group, who have committed to a six-month holding period post-listing.
The proceedings from the IPO will be allocated as follows: 35% will go toward developing new passenger vehicle models, 25% will fund research and development for next-generation vehicles and technologies, 20% will support the international market expansion, 10% will upgrade production facilities in Wuhu, Anhui, and 10% will cover working capital and general business needs.
Chery was converted into a joint stock limited company in 2008 as a strategic step towards scaling operations and fulfilling expansion goals. The main shareholder of Chery Automobile after the planned IPO in Hong Kong is typically the state-owned company Anhui Bayi Holdings. However, the precise post-IPO ownership may vary depending on the IPO structure and specifics announced by Chery.
The listing of Chery is timed to capitalise on the growing global interest in the Chinese electric vehicle supply chain. This move follows a similar trend set by Contemporary Amperex Technology, an EV battery maker, and Hesai Group, a LiDAR sensor supplier, who both saw increases in their share prices following their respective Hong Kong IPOs.
Chery manufactures a wide array of vehicles, including both conventional petrol-powered automobiles and electric vehicles. In the first three months of this year, the company reported a 24.2% increase in revenue to 68.22bn yuan, with an adjusted profit of 4.86bn yuan. More than one-third of Chery's total revenue was generated from its international markets in the initial quarter.
The company anticipates expansion in several areas between 2025 and 2030, operating in developing markets to meet the growing demand for affordable and efficient transportation solutions. Chery's IPO in Hong Kong marks a significant step in its journey towards becoming a global player in the automotive industry.
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