Dongfeng Motor Rises to Record of 27% After Unveiling Shenzhen IPO Plan
Shares of Dongfeng Motor Group Company Ltd. (HKEX: 00489) soared to a record of 27% Tuesday, according to Bloomberg before closing 14% higher after unveiling mainland China IPO plans.
In a statement Monday, the automaker said it will issue as much as 957 million A-shares, as its board has approved a listing plan to list Shenzhen's ChiNext board. While the shares will be no more than 10% of Dongfeng's total amount, it did not note how much it expects to raise.
As Sino-U.S. trade tensions remain high, Dongfeng becomes the latest Chinese firm to make an effort to list again at home, attracted to recently relaxed rules. The move by Wuhan-based Dongfeng follows fellow automobile manufacturer Geely Automobile Holdings Ltd., (HKEX: 00175) which disclosed a similar listing plan last month for Shanghai's Nasdaq-Esque STAR Market. Since announcing its IPO plans last month, shares of Geely have risen 34% to date.
At the close of trading today for Dongfeng, the stock was trading more than eight times its three-month daily average. Shares of Dongfeng are down nearly 21% year-to-date.
Operating since September 1969, Dongfeng sells commercial vehicles, passenger vehicles, auto engines, and parts. For June, production and sales volume of Dongfeng plummeted nearly 20% and 18% year-over-year, according to the company's latest report.
The company plans to use a portion of the proceeds towards investment in new-energy vehicles.
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