Geely seeks Shanghai STAR Market listing

01 September 2020 - 13:07

By Reuters

Geely Automobile Holdings Ltd has applied for a public share sale on Shanghai's Nasdaq-style STAR Market, exchange filings published on Tuesday showed.

China's highest-profile car maker, thanks to parent group investments in Daimler AG and Volvo Cars, plans to use the proceeds to fund investment worth about 20 billion yuan (roughly R48.9bn) in new car models and technologies, it said in the filing.

The Hangzhou-based car maker, controlled by its billionaire chairperson Li Shufu, posted a January-June net profit of 2.3 billion yuan (roughly R5.6bn).

Sales were down 19% to 530,446 vehicles, with revenue down 23% at 36.82 billion yuan (roughly R90.1bn).

Under merger talks that were suspended in July, its parent group had planned to merge the car maker with affiliate Volvo Cars and list the successor in Hong Kong and possibly Stockholm.

Geely's Hong Kong-listed shares trade at 22 times trailing earnings, compared with STAR Market's average earnings multiples of 96.

Its Shanghai listing plan could boost its Hong Kong-traded shares.

Semiconductor Manufacturing International Corp's (SMIC) Hong Kong-listed shares more than doubled in the six months ahead of its Shanghai listing on July 16.

Geely has hired China International Capital Corp and Huatai United Securities as underwriters for the listing, its prospectus showed.