Dongfeng Motor Rallies in Hong Kong on China Mainland Listing Plan

Shares of Dongfeng Motor Group, one of China’s big four automakers, surged in Hong Kong after the company said it intends to issue stock on the Chinese mainland for the first time.

Dongfeng Motor [HKG:0489] gained 13.5 percent today to HKD5.80 (75 US cents), the stock’s highest closing price since mid-March, after soaring almost as much as 27 percent earlier in the day.

The Wuhan-based company is looking to sell up to 957 million shares, representing as much as 10 percent of its total outstanding after the sale, on Shenzhen's ChiNext growth-enterprise board, it said in an exchange filing late yesterday.The funds raised would go toward a new electric passenger vehicle brand, digital and service infrastructure, and supplement working capital.

Founded in 1969, Dongfeng Motor’s parent company took the unit public in 2005. It has set up joint ventures with foreign car companies, including Japan's Honda Motor and France's PSA Group.

In the first half of this year, Dongfeng Motor made a loss of CNY27.7 million (USD4 million) as revenue fell 34 percent to CNY2.1 billion (USD295.5 million) from a year ago due to the Covid-19 pandemic. It sold 1.1 million, 17 percent fewer.

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