Shares of XPeng Inc. erased opening gains to decline on their first day of trading in Hong Kong on Wednesday, as concerns over Beijing’s increased regulatory scrutiny over the tech sector weighed on the Chinese electric-car maker’s debut.
The stock lost as much as 3.5% to 159.30 Hong Kong dollars a share, from an offer price of HK$165.00. Shares had opened 1.8% higher.
Hong Kong-listed Chinese tech giants have posted steep losses in recent sessions, as investor concerns intensify over the industry’s regulatory risks. Beijing late Tuesday said it would tighten rules for Chinese companies listed overseas or seeking to sell shares abroad, which could hinder attempts by homegrown tech firms including Xpeng to raise money in the U.S.
Chinese authorities had earlier this month launched a series of regulatory actions against ride-hailing giant Didi Global Inc., and initiated data-security reviews into several other popular mobile apps.
Meituan lost over 10% in the past week, while Tencent Holdings Ltd. fell by around 7% in the same period.
Xpeng, a major rival to Tesla in China’s fast-growing EV market, raised net proceeds of about HK$13.78 billion from the latest offering before the over-allotment option is exercised. This marked its third major share sale in less than a year, leading to combined proceeds of around US$6 billion. The company, with a market value of over US$30 billion, raised US$1.7 billion from its New York initial public offering last August and sold another US$2.5 billion of U.S. stock in December.
XPeng’s Hong Kong offering, which was more than 14 times oversubscribed, was a dual primary listing, instead of a secondary listing, due to the company’s short history as a U.S. public firm. This means Xpeng will need to fully comply with listing rules in both the U.S. and Hong Kong.
Shares were last 1.2% lower at HK$163.00.