Shares in major Chinese carmaker Chery Automobile rose rapidly after raising $1.2 billion through its initial public offering (IPO).
Chery Automobile, China’s largest vehicle exporter, saw its shares climb sharply during its Hong Kong debut after raising HK$9.1 billion ($1.2 billion). The automaker joined a wave of companies from mainland China in selecting Hong Kong as a destination for fundraising through new listings.
The stock opened at HK$34.20, up 11.2% on its initial offering (IPO) price of HK$30.75 per share. After this strong performance, Chery’s market valuation moved close to $25 billion, placing it above Geely Automobile but below Great Wall Motor.
Investor demand for Chery shares proved overwhelming, with the retail portion oversubscribed more than 300 times, according to filings submitted by the firm. Institutional investors also showed a keen interest, with the allocation directed towards them being oversubscribed more than 11 times.
Chery’s strong Hong Kong market debut
Almost half of the total offering was allocated to cornerstone buyers ($587 million), helping to support the share sale. This included China’s Enterprise Mixed-Ownership Reform Fund, which acquired stock worth $190 million, while Hillhouse Capital subscribed for $60 million.
Chery confirmed 35% of IPO proceeds will go into research and development across new vehicles, particularly electric and smart models. Another 25 percent will be dedicated to developing the next-generation model within the next three years, expanding its global product line.
A day before, the company had cancelled its official listing ceremony in Hong Kong due to the Super Typhoon Ragasa. Despite this, trading proceeded smoothly, marking a solid start for one of this year’s largest automotive IPOs globally.
Chery continues its global expansion
Chery has been expanding aggressively across overseas markets, having enjoyed notable success in Southeast Asia, the Middle East, Europe and South America. Its Jetour sub-brand will launch three SUVs in Poland this November, while its Omoda and Jaecoo brands have also entered the UK.
The carmaker delivered a total of 242,736 vehicles in August, with more than half exported, representing double-digit annual growth for both domestic and overseas sales. Last year, Chery sold more than 1.14 million vehicles abroad, which made up around 40% of its total output.
Industry experts said Chery benefits from producing vehicles in multiple countries, reducing its exposure to tariffs imposed on Chinese-made cars in Western markets. Russia, the Middle East and Latin America are among its best performing markets, where Chery continues to see steady growth.
Its Hong Kong debut also reflects the city’s improving position as an IPO hub, with proceeds rising to a four-year high. Upcoming listings, including Zijin Gold International’s $3.2 billion sale, are expected to continue Hong Kong’s streak of billion-dollar offerings.
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