To The Moon

People visit the booth of Chinese electric vehicle (EV) maker Li Auto during a media day for the Auto Shanghai show in Shanghai, China April 20, 2021.

$Li Auto(LI)$

HONG KONG, June 30 (Reuters Breakingviews) - The Chinese hybrid-electric car maker listed in New York and Hong Kong is taking advantage of a rally in its share price to raise $2 billion through fresh American Depositary Shares. The stock has nearly doubled in value since mid-May. Up around 19% year-to-date, it is handily outperforming rivals Tesla $Tesla Motors(TSLA)$ , Nio $NIO-SW(09866)$ and Xpeng $XPENG-W(09868)$ – all of them down over 30% - and the CSI New Energy Vehicles index.

That partly reflects the markets enduring enthusiasm for clean energy plays as nearly everything else sags or is pulled. Investors poured $6.7 billion into a private placement in June by Shenzhen-listed battery maker Contemporary Amperex Technology $Contemporary Amperex Technology Co.,Ltd.(300750)$ and lapped up the initial public offering of its South Korean rival LG Energy Solution(373220.KS).

It also reflects excitement over the upcoming release of the issuer’s hybrid Li L9 SUV model; Citi analysts predict it will grab market share from luxury marques. By virtue of being a U.S. listed Chinese company, Li Auto might be booted off Nasdaq soon. But it has a Hong Kong ticker as backup. On balance, it’s a well-timed capital raise for research and development that will buttress its competitive position. (By Pete Sweeney) 

$LI AUTO-W(02015)$