Xpeng Gears up for Primary Dual Listing in Hong Kong

Electric car maker Xpeng (XPEV) has secured regulatory approval for a dual primary listing on the Hong Kong Stock Exchange, according to a Reuters report. The smart car technologies company also plans to establish two new plants in China.

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Listing in Hong Kong will allow Chinese investors to invest in the company via the Stock Connect regime, linking the China and Hong Kong markets. The dual listing efforts come after Xpeng went public in the U.S. last year. (See Xpeng stock chart on TipRanks)

Xpeng develops smart car technologies specializing in autonomous driving functions. The company mainly sells its two sedan models in China, the world’s largest car market.

Demand for new energy vehicles, including battery plug and fuel cell, is high in China. Reuters reports that sales could explode by more than 40% in the next five years. In the race for sales, Xpeng faces stiff competition from Tesla (TSLA) and Nio (NIO).

Citigroup analyst Jeff Chung maintained a Buy rating on the stock but raised the price target to $50.30 from $50, implying 25.8% upside potential from current levels. According to the analyst, Xpeng is a better option when compared against Nio.

“Terminal value suggests XPEV is better than NIO. We estimate the terminal value on XPeng with the following conclusion – Ultimate XPeng market cap is equivalent to US$32.2bn vehicle market cap + US$43bn software earnings market cap (total at US$75.3bn, 87% higher than market cap calculated based on our P/S driven TP),” Chung stated.

Consensus among analysts is a Strong Buy, based on 5 Buys. The average Xpeng analyst price target of $49.92 implies 24.8% upside potential from current levels.

XPEV scores 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.