Silver Chery SUV on a yellow platform in a factory with bright lights

A silver Chery SUV is showcased on a yellow assembly line platform in a brightly lit factory setting. By MDL.

Economy

Chery’s $1.2 Billion IPO: How the Automaker Drives Ahead in China’s Electric Vehicle Revolution

Chery’s IPO raised $1.2B, shares surged 11.2%. Funds fuel EV/smart vehicle R&D and expansion.

byAndres Castro

September 25, 2025, 8:14 AM

Executive Summary

Chery Automobile’s shares surged 11.2% on its Hong Kong debut after a successful $1.2 billion IPO, making it the second-largest in Hong Kong this year.

The IPO demonstrated robust investor demand, with shares priced at the top end of their range and both institutional and retail tranches significantly oversubscribed.

Chery plans to allocate 60% of the IPO proceeds to research and development for passenger vehicles, product portfolio expansion, and next-generation vehicle technology, focusing on electric and smart vehicle sectors.

The Story So Far

Chery Automobile’s successful IPO reflects strong investor confidence in its strategic ambition to expand within China’s rapidly evolving electric and smart vehicle sectors, which are key strategic areas for the nation’s automotive industry, with the significant capital raised earmarked for crucial research and development in next-generation vehicle technology.

Why This Matters

Chery Automobile’s successful $1.2 billion IPO and subsequent share surge underscore robust investor confidence in its strategic pivot towards electric and smart vehicle technology. This significant capital injection is poised to fuel the company’s ambitious R&D and product development plans, enabling it to aggressively expand its market presence and solidify its competitive standing within China’s rapidly evolving automotive landscape.

Who Thinks What?

Chery Automobile views its successful IPO as a significant capital injection to fund strategic expansion, particularly in research and development and product portfolio growth within the electric and smart vehicle sectors.

Investors, including both institutional and retail participants, demonstrated robust confidence and strong appetite for Chery shares, believing in the company’s growth trajectory in the rapidly evolving electric and smart vehicle segments.

Chinese automaker Chery Automobile saw its shares surge 11.2% on the Hong Kong Stock Exchange on Thursday, following its successful $1.2 billion initial public offering. The strong debut reflects investor confidence as the company aims to expand its presence in the rapidly evolving electric and smart vehicle sectors, a key strategic area for China’s automotive industry.

IPO Performance and Market Reception

Chery, known for its Chery, Jetour, and iCAR brands, opened trading at HK$34.2 per share. This strong performance occurred on a day when the broader Hang Seng Index recorded a modest 0.1% increase.

The company sold 297.4 million shares at HK$30.75 each, positioning its valuation at almost $23 billion. This makes it the second-largest initial public offering in Hong Kong for the current year.

Investor Demand and Capital Injection

The shares were priced at the top end of their HK$27.75 to HK$30.75 range, indicating robust investor appetite. The institutional tranche of the offering was oversubscribed 11.6 times, while the retail portion saw an even greater demand, being 308 times covered.

Cornerstone investors played a significant role, committing $587 million, which accounted for nearly half of the total IPO deal. Notable participants included China’s Enterprise Mixed-Ownership Reform Fund, which subscribed for approximately $190 million worth of stock, and private equity group Hillhouse, which invested $60 million.

Strategic Investment in Future Growth

Chery has outlined clear plans for the utilization of the IPO proceeds, emphasizing future-oriented investments. Approximately 35% of the funds are earmarked for research and development initiatives concerning passenger vehicles and the expansion of its product portfolio.

An additional 25% of the proceeds will be dedicated to the development of its next-generation vehicle technology over the coming three years. This strategic allocation underscores Chery’s commitment to innovation in the competitive electric and smart vehicle market.

Key Takeaways

Chery Automobile’s successful Hong Kong debut highlights strong investor belief in its growth trajectory within the electric and smart vehicle segments. The significant capital raised is poised to fuel the company’s ambitious R&D and product development plans, cementing its position in China’s dynamic auto industry.