Evergrande Group Chairman Xu Jiayin attends Evergrande New Energy Auto Global Strategic Partners Summit on November 12, 2019 in Guangzhou, Guangdong Province, China.
VCG | Visual China Group | Getty Images
GUANGZHOU, China – Shares of Chinese real estate giant Evergrande’s electric car unit rose a staggering 67% Monday after the company raised significant funding through a new stock sale.
China Evergrande New Energy Vehicle Group soared to a record high of 50 Hong Kong dollars before discounting some of those gains. The company’s shares closed at 45.35 Hong Kong dollars.
The stock skyrocketed after the Chinese electric car company issued 952.38 million shares to six investors at a price of $ 27.30 Hong Kong dollar and raised net proceeds of 26 billion Hong Kong dollar ($ 3.35 billion) .
The financing is another sign that the Chinese electric car market is heating up, and Evergrande could pose a challenge to Tesla and domestic rivals such as Nio and Xpeng Motors.
Last year, Evergrande showed off six new electric vehicles under the Hengchi brand, hoping to start production this year. The company has not yet sold a single car.
In September, the company raised approximately HK $ 4 billion by selling shares to investors, including Chinese internet giant Tencent and ride-hailing service Didi.
China Evergrande New Energy Vehicle Group is also preparing for listing on the Nasdaq-like Science and Technology Innovation Board or the Star Market in Shanghai.
China’s electric car companies have been aggressively raising capital to ramp up production and get ahead of the competitive market.
Xpeng Motors raised $ 1.5 billion through an IPO in the US last year and secured a 12.8 billion yuan ($ 1.98 billion) line of credit this month.
This month, BYD – the Chinese electric car maker backed by US billionaire Warren Buffett – said it has raised $ 29.9 billion in Hong Kong shares through the issuance of new shares.