Lixiang Automotive will be listed on US stocks at the end of the month. What is the issue price? On the morning of July 25th, Lixiang Auto updated its prospectus to the US SEC and announced that the issuance range was 8 to 10 US dollars.
Lixiang revealed this month that it will officially be listed on the Nasdaq market on the evening of July 31, Beijing time, with the stock code “LI”. The updated prospectus shows that its public offering of IPO shares is 95 million ADS, and the IPO underwriter has 14.25 million ADS oversubscription rights. According to the currently announced issuance price, if the underwriter exercises the oversubscription right, the funds raised by Lixaing Auto’s IPO will reach 874 million to 1.093 billion US dollars.
In addition, the updated prospectus shows that Hillhouse Capital is interested in purchasing the ADS that is not more than US$300 million in the IPO of Lixiang Auto at the price of the initial public offering. In addition, Lixiang Auto stated in the prospectus that it has received a cornerstone investment of US$380 million, the subscription price is the final IPO price; Among them, Meituan plans to subscribe for US$300 million, Wang Xing (Funder of Meituan) personally subscribes for US$30 million, and ByteDance subscribes for US#30 million, Kevin Sunny Holding Limited subscribed for 20 million US dollars. It can be seen that with the IPO funds raised and cornerstone investment, the total IPO financing of Lixiang Auto will reach 1.254 billion US dollars to 1.473 billion US dollars.
It is worth mentioning that Lixiang Auto announced the second quarter (Q2) financial report in the updated prospectus. According to the data, Lixiang Auto had no revenue in 2018, with revenue of 284 million yuan in 2019 and 1.9 billion yuan in Q2 revenue in 2020, an increase of 128.6% from the first quarter of 851.7 million yuan. In terms of net profit, its net losses in 2018 and 2019 were 1.532 billion yuan and 2.438 billion yuan respectively; the net loss in the second quarter of 2020 was 75.2 million yuan, and the net loss in the previous quarter was 77.1 million yuan.
Car manufacturing is a long life cycle industry, it is not realistic to require a car company to achieve net profit in the short term. However, when NIO is still struggling to achieve a positive gross profit margin, the gross profit margin of Lixiang Auto Q2 has further increased. The data shows that the gross profit margin of Lixiang Auto Q2 was 13.3%, which increased again from 8% in the first quarter. It is also worth mentioning that the cash flow of Lixiang has turned positive. As of June 30, 2020, Lixiang Auto generated a positive cash flow of 451.7 million yuan, while its first quarter was a negative operating cash flow of 63 million yuan.
In terms of sales volume, Lixiang Auto delivered a total of 6,604 units in Q2, an increase of 128% from the 2,896 units in the first quarter. As of June 30, Lixiang Auto had 21 retail stores, 18 delivery centers, and 17 service centers nationwide, with 700 sales and service personnel.
If the IPO is successful, it will be the second startup company of Lixiang Auto’s founder Li Xiang to land in the US capital market. Li Xiang once founded autohome.com.cn (NYSE: ATHM) and listed on the New York Stock Exchange in 2013. At that time, the issue price was US$17. As of the close on July 24, Eastern Time, the share price of autohome.com.cn was US$77.76, a four times more increase from the time of listing.