Recently, NIO released the latest announcement that it will be listed on the Hong Kong Stock Exchange by Way of Introduction and is expected to start trading on March 10. The announcement stated that NIO applied for the secondary listing of the company’s Class A ordinary shares on the Hong Kong Stock Exchange. The listing is by way of introduction only, and no shares will be issued or sold. Morgan Stanley, Credit Suisse and CICC are its sponsors.
Regarding the reasons for listing in Hong Kong, NIO believes that the stock markets in Hong Kong and the United States attract different investors, and the company directors believe that it is appropriate and beneficial for the company to apply for a secondary listing on the Hong Kong Stock Exchange by way of introduction.
The announcement stated that the company’s American depositary shares are currently listed and traded on the New York Stock Exchange. The company has applied for the secondary listing of the company’s Class A ordinary shares on the main board of the Hong Kong Stock Exchange in accordance with the Hong Kong Listing Rules. The listing of the Class A ordinary shares on the Main Board of the Hong Kong Stock Exchange is by way of introduction only, and no shares will be issued or sold in connection with the listing. The company’s Class A ordinary shares will be traded in Hong Kong dollars in board lots of 10 shares on the Hong Kong Stock Exchange.
The difference between Way of Introduction and IPO is that the former will not issue new shares, but the company’s shareholders will apply for listing and trading of their old shares, which will not involve financing.
According to the regulations of the Hong Kong Stock Exchange, the introduction of listing is divided into three forms: one is that the securities applying for listing have been listed on one stock exchange, seeking to be listed on another stock exchange, or for the transfer listing of the same stock exchange. The second is split listing, that is, the issuer’s securities are distributed in kind by a listed issuer to its shareholders or shareholders of another listed issuer.
The third way is to exchange shares. That is, securities are issued by an overseas issuer in exchange for the securities of one or more Hong Kong-listed issuers, and the listing status of such Hong Kong issuers will be revoked at the same time as the overseas issuer’s securities are listed. In addition, during the transition period of listing, NIO, as a stock borrower, entered into a stock borrowing agreement on February 27 to ensure that designated dealers (Morgan Stanley, CIMC) can obtain access to the stock at any time after listing and during the transition period. An appropriate number of Class A ordinary shares for settlement purposes.
According to the prospectus, NIO will provide up to 41.4 million Class A ordinary shares or about 2.7% of the issued Class A ordinary shares after listing as initial liquidity. NIO ADR closed at $20.94 on Friday, and each ADR of the company is equivalent to 1 share of common stock.