Evergrande Group President Xu Jiayin attends Evergrande’s Global New Energy Strategic Partners Summit on November 12, 2019 in Guangzhou, Guangdong Province, China.
VCG | Visual China Group | Getty Images
GUANGZHOU, China – Shares in the electric vehicle unit of Chinese real estate giant Evergrande rose 67% on Monday after the company raised significant funding through a new share sale.
New Energy Vehicle Group China Evergrande peaked at $ 50 in Hong Kong before reducing some of those gains. The company’s stock closed at 45.35 Hong Kong dollars.
The shares skyrocketed after the Chinese electric car company issued 952.38 million shares to six investors at a price of $ 27.30 Hong Kong dollars and raised net revenues of 26 billion Hong Kong dollars ($ 3.35 billion).
The financing is another sign that China’s electric car market is heating up, and Evergrande could pose a challenge for Tesla, as well as domestic rivals like Nio and Xpeng Motors.
Last year, Evergrande displayed six new electric vehicles under the Hengchi brand, with the hope of starting production this year. The company has not yet sold a single car.
In September, the company raised about 4 billion Hong Kong dollars from selling shares to investors, including Chinese internet giant Tencent and the greeting service Didi.
New Energy Vehicle Group China Evergrande is also preparing to be listed on the Shanghai Nasdaq-style Science and Technology Innovation Council, or Star Market.
Chinese electric car companies have been aggressively raising capital to increase production and take the lead in the competitive market.
Xpeng Motors raised $ 1.5 billion in an initial public offering in the United States last year and this month secured a credit line of 12.8 billion yuan ($ 1.98 billion).
This month, BYD – the Chinese electric car maker backed by US billionaire Warren Buffett – said it raised $ 29.9 billion from Hong Kong by issuing new shares.