Chinese automaker Chery Automobile is set to launch an initial public offering (IPO) in Hong Kong, aiming to raise up to HK$9.15 billion (approximately $1.18 billion USD). This move marks Hong Kong’s largest IPO of 2025 and underscores Chery’s strategic shift towards electric and smart vehicles.
The offering includes 297.4 million H-shares priced between HK$27.75 and HK$30.75 each. Final pricing is scheduled for September 24, with trading on the Hong Kong Stock Exchange expected to commence the following day, September 25. Proceeds from the IPO will be allocated as follows: 35% for research and development of new passenger vehicles, 25% for the development of next-generation vehicles over the next three years, and the remainder for general corporate purposes.
Simultaneously, Chery is planning to virtually exit its largest foreign market, Russia, due to the impact of international sanctions. The company has faced challenges in exporting vehicles to Russia, including rising tariffs and intensifying global competition from other Chinese brands. Despite these obstacles, Chery has maintained a broad international network across over 100 countries and continues to explore new markets.
In 2024, Chery achieved a 56% increase in domestic sales, primarily driven by a surge in electric and hybrid vehicle sales. The company’s strong performance has positioned it as a significant player in the global automotive market. However, the IPO’s valuation of 11 times its $2 billion earnings from the previous year surpasses valuation multiples of rivals like Geely and Great Wall Motor, posing a significant test amid turbulent market conditions. The IPO has garnered interest from cornerstone investors, with commitments totaling up to $587 million. The outcome of this listing could influence the trajectory for other state-owned Chinese automakers eyeing Hong Kong debuts. As Chery navigates its exit from the Russian market and focuses on expanding its presence in the electric vehicle sector, the success of this IPO will be closely watched by investors and industry analysts alike.
