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Why Are Investors Getting All Excited With Alibaba-Backed Xpeng’s IPO?

Another Chinese EV company is going public, and you might want to know more.

Electric Vehicle Stocks Are Having Their Best Year; Is This Just The Beginning?

Chinese electric vehicle stocks are on fire as the Tesla (TSLA Stock Report) halo spreads. The top Chinese EV stocks are buzzing with activity on Wednesday with Nio (NIO Stock Report) and Li Auto (LI Stock Report) both reporting double-digit percentage gains. And as if these aren’t enough, another electric vehicle maker from China is going public in the U.S. stock market soon. Here’s why you need to know about the Alibaba (BABA Stock Report)-backed electric vehicle venture.

Alibaba-Backed Xpeng’s IPO Process Kicks Off

Xpeng Motors will trade under the ticker ‘XPEV’. Xpeng Motors (XPEV Stock Report) plans to issue 85M ADSs at $15 per share to value the company at about $11B, according to Reuters. The company previously gave an IPO price range of $11 to $13 per share. With the new IPO pricing at $15, Xpeng is expected to raise about $1.28 billion. The listing process comes at a time where the company could capitalize on the current hot market for EV related stocks.

Unlike other EV manufacturers such as Nikola (NKLA Stock Report), Xpeng has a healthy sales record. The company already has two EV models on the market. These are an SUV, the Xpeng G3, and a sedan, the Xpeng P7. The latter was only launched in April, and Xpeng has shipped 1,966 units of them. The P7 registered sales of 1,641 units in the last month alone. Thus far, Xpeng has sold more than 20,700 EVs.

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When is Xpeng Motors Going Public?

Here comes the key question, when is Xpeng going public? Drum rolls… actually, the date hasn’t been set yet. What we know is that the company filed its IPO paperwork with the SEC on August 7, 2020. From the prospectus, the company disclosed that it generated $2.36 billion RMB in revenue last year. However, the company only managed to generate $1 billion RMB for the first half of 2020. Like other electric vehicle manufacturers, Xpeng’s drop in sales volume could be due to the coronavirus pandemic affecting demand and shipments.

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What To Watch Among Chinese EV Stocks?

No doubt, it has been a strong session for Chinese EV players in general in recent weeks. Nio, Li Auto and Kandi Technologies (KNDI Stock Report) all posted strong gains this week. Both NIO stock and LI stock have received ‘Buy’ ratings. It would be sensible for investors to pay close attention to the China automobile sales report for July which is coming out next week. That will be an indicator of how the demand for Chinese electric vehicles is faring. The reality is, China’s EV market remains the largest in the world. There is no reason to expect it to be a winner-takes-all market. Investors looking to gain exposure to this space have the luxury of being able to choose from a number of strong options.

By Amos C

Amos is the global markets correspondent for His boots on the ground insight into emerging markets has given him the unique ability to stay ahead of new market trends and deliver timely data when it matters most. Based in Asia, Amos has made a point to monitor the foreign markets closely, dissect stock market trends and then apply them to the North American markets; in addition to global markets.

Amos has a deep-rooted background in foreign exchange and commodities. His previous experience working within the cryptocurrency arena has given him the advantage to identify the fast-moving stock market and financial trends. Amos calls Hong Kong home and has been a financial content writer for the last 3 years.

He has managed teams of international media strategists and financial writers to cover all top stories in the stock market each day. His skills include his tireless drive to find the most valid information and actionable details that investors can use to formulate valid decisions on stocks to buy or stocks to avoid. Furthermore, Amos’ ability to cover trending stories across the globe brings a fresh perspective on key data and how it not only affects the North American markets but also how it could translate to the world markets alike.

Most of the time you can find him diving into corporate filings, focusing on fundamentals that could influence major market moves. One of his passions is researching technology and biotechnology stocks. Some of the most cutting-edge innovations have stemmed from these industries. While many don’t become industry blockbusters, the processes and applications of these innovations has led to some of the biggest developments known to man in the modern age. As a global correspondent, Amos has been able to see both sides of the story as it relates to world news and offers a true, personal approach, cutting through the noise of the mass media. He was integral in reporting on the Hong Kong uprising and doing first-hand research on international sentiment from the novel coronavirus.

In his free time, Amos is an avid fan of music and art and enjoys attending concerts.

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