IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

XPeng IPO Initiation: Charging up for a Long Ride

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Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> is the first company to successfully commercialise EREVs (extended-range electric vehicle) in China, the Li ONE. Li ONE is a six-seat, large premium electric SUV which began volume production and deliveries in November 2019 and December 2019, respectively. Li Auto has launched its IPO at an indicative price range of $8.00-10.00 per ADS. At the mid-point of the IPO price range, Li Auto will raise net proceeds of $813.2 million at a fully diluted market cap of $7.9 billion. Also, Li Auto will raise net proceeds of $380.0 million from concurrent private placements with existing shareholders. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/li-auto-ipo-initiation-on-a-charge" target="_blank" rel="noopener">our initiation note</a>, we stated that the IPO seems to be timed to take advantage of the surging share prices of NEV (new energy passenger vehicles) manufacturers such as <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a> and <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a>. On balance, for investors seeking exposure to the China NEV sector, Li Auto’s fundamentals are attractive, in our view. Our valuation analysis suggests that the price range is attractive. </p></div></div></div>

Li Auto Inc. (LI US) is the first company to successfully commercialise EREVs (extended-range electric vehicle) in China, the Li ONE. Li ONE is a six-seat, large premium electric SUV which began volume production and deliveries in November 2019 and December 2019, respectively. Li Auto has launched its IPO at an indicative price range of $8.00-10.00 per ADS. At the mid-point of the IPO price range, Li Auto will raise net proceeds of $813.2 million at a fully diluted market cap of $7.9 billion. Also, Li Auto will raise net proceeds of $380.0 million from concurrent private placements with existing shareholders. In our initiation note, we stated that the IPO seems to be timed to take advantage of the surging share prices of NEV (new energy passenger vehicles) manufacturers such as Tesla Motors (TSLA US) and NIO Inc (NIO US). On balance, for investors seeking exposure to the China NEV sector, Li Auto’s fundamentals are attractive, in our view. Our valuation analysis suggests that the price range is attractive. 

Li Auto

Li Auto IPO: Valuation Insights