Chinese electric-vehicle maker Nio Inc. NIO, +5.43% rallied in its market debut Wednesday after the Shanghai-based company, which has billed itself as an emerging rival to Tesla Inc. TSLA, +3.97% , priced its offering in the U.S. near the bottom of expectations.
The startup, backed by Chinese internet giant Tencent Holdings Ltd. 0700, +0.13% , had to contend with a difficult market environment in launching its initial public offering. Shares in rival car makers have slumped and Chinese stocks have been buffeted by concerns about growth, trade and currency weakness.
Read: Nio’s IPO: 5 things to know about China’s Tesla rival
“We had actually a healthy book and then some orders got pulled or reduced because of market conditions,” Nio’s chief financial officer, Louis Hsieh, said in an interview. Hsieh said investors were also wary that the company didn’t have a long operating history, which he called a “fair criticism.”
American depositary receipts of Nio closed 5.4% higher than the company’s IPO price of $6.26 after spending much of the morning in the red. The stock traded down as much as 15% earlier Wednesday. At its IPO price, the company was valued at about $6.4 billion. At $6.26 per ADR, the IPO would yield proceeds of $1 billion, before subtracting the costs of the share sale. Hsieh said Nio needs the capital to build its own manufacturing plant in Shanghai.
An expanded version of this report appears on WSJ.com.
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