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China’s EV Maker WM Motor Said to Weigh $1 Billion Hong Kong IPO

(Bloomberg) -- Chinese electric vehicle manufacturer WM Motor Holdings Ltd. is considering raising about $1 billion in a Hong Kong initial public offering, according to people familiar with the matter.

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The company could launch the share sale before the end of the year, said the people, who asked not to be identified as the information is private. Deliberations are ongoing and details including size and timeline could change, the people said.

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The firm filed pre-listing documents with the Hong Kong exchange on Wednesday, in an initial step to join a slew of competitors already trading in the Asian financial hub. Large size deals vanished from Hong Kong’s exchange this year as factors including regulatory woes in China, surging inflation and hawkish central banks led several issuers to scrap IPO plans worldwide.

A representative for WM Motor declined to comment. Haitong International Capital Ltd., CMB International Capital Ltd. and BOCI Asia Ltd. are joint sponsors, according to the filing.

WM Motor was working with financial advisers for an IPO in Shanghai about two years ago, Bloomberg reported then, but an offering didn’t take place.

Founded in 2015, the Shanghai-based company doubled sales to 44,152 vehicles in 2021 from a year earlier, contributing to a 77.5% jump in revenue, according to the filing. As of March 31, the company had cash and cash equivalents of 3.68 billion yuan ($551 million).

Starting with electrified sports utility vehicles and later turning to sedans, WM is expected to launch a total of five models by 2022, targeting China’s young and tech-savvy users, particularly families, it said. The company has already established two manufacturing bases in Wenzhou in Zhejiang province, and Huanggang in Hubei province, with a total annual production capacity of 250,000 units by completion.

Chinese EV startups Xpeng Inc., Li Auto Inc. and Nio Inc. are all trading on the Hong Kong exchange, in addition to their US listings, to widen their fundraising channels as well as avoiding potential geopolitical risks from Washington.

In the meantime, the automotive industry in China, in particular electric vehicle production, has been placed under huge pressure by surging raw material prices, Covid-related disruptions, and cooling economic growth.

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