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 Secondary Listing: The Battle to Rule the Teslaverse

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>Hot on the heels of the <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>'s recent offering to raise net proceeds of $1.3 billion, <a href="https://www.smartkarma.com/entities/xpeng-motors" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng Motors (XPEV US)</a> is seeking to raise as much as $2.0 billion (at the last close price) through an issue of 40 million ADSs. The funds will be used for R&amp;D (Smart EVs and software, hardware and data technologies), S&amp;M expenses (expansion of sales channels, supercharging network and international footprint), investments in core technologies of Smart EV, and working capital needs.</p></div><div><p>The follow-on offering comes just three months from the August IPO, where Xpeng raised net proceeds of $1.4 billion at $15.00 per ADS. The shares have been of a tear and have risen 3.3x since the IPO. The net cash including lease liabilities stood at $2.4 billion at the end of 9M20, which points to an opportunistic raise to build a war chest. The raise is unsurprisingly in light of Li Auto's successful raise and the strong share price run, which indicates that investor enthusiasm for the EV sector remains undiminished.  </p></div><div><div><div class="content-highlight"><p>We remain bullish on Xpeng’s prospects and believe that the company remains well-placed to claim its place as a key EV player. Notwithstanding, the strong share price run, the shares continue to look attractive relative to EV peers. Overall, we would participate in the placement.</p></div></div></div>

Hot on the heels of the Li Auto Inc. (LI US)'s recent offering to raise net proceeds of $1.3 billion, Xpeng Motors (XPEV US) is seeking to raise as much as $2.0 billion (at the last close price) through an issue of 40 million ADSs. The funds will be used for R&amp;D (Smart EVs and software, hardware and data technologies), S&amp;M expenses (expansion of sales channels, supercharging network and international footprint), investments in core technologies of Smart EV, and working capital needs.The follow-on offering comes just three months from the August IPO, where Xpeng raised net proceeds of $1.4 billion at $15.00 per ADS. The shares have been of a tear and have risen 3.3x since the IPO. The net cash including lease liabilities stood at $2.4 billion at the end of 9M20, which points to an opportunistic raise to build a war chest. The raise is unsurprisingly in light of Li Auto's successful raise and the strong share price run, which indicates that investor enthusiasm for the EV sector remains undiminished.  We remain bullish on Xpeng’s prospects and believe that the company remains well-placed to claim its place as a key EV player. Notwithstanding, the strong share price run, the shares continue to look attractive relative to EV peers. Overall, we would participate in the placement.

XPeng

Xpeng Placement: Charging Up