Nio said it currently has sufficient cash reserves and no immediate need to raise capital in the short term, and the move that could help bring in more investors.

(Image credit: CnEVPost)

Nio announced today that it will list in Hong Kong by way of introduction, but without raising additional capital. Many people had some confusion about this and now the company has given their explanation.

The move will help bring in more investors by providing more choices of trading venues and more flexible trading hours, and will be beneficial to the company's long-term growth, according to a response shared with CnEVPost.

Nio currently has ample cash reserves and no immediate need for financing in the near term, the company said.

The company had cash reserves of about RMB 47 billion ($7.46 billion) at the end of the third quarter of 2021 and closed a $2 billion financing in the fourth quarter of last year, it mentioned.

Nio has not yet reported fourth-quarter earnings, and its cash reserves as of the end of 2021 are unknown.

Earlier today, Nio said it has applied to list its already issued Class A ordinary shares in Hong Kong by way of introduction.

The shares will be listed on the main board of the Hong Kong Stock Exchange (HKEX) as a secondary listing and they are expected to commence trading on Thursday, March 10, 2022, subject to final approval.

The company received a letter of in-principle approval from the HKEX for the listing application on February 28, 2022, granting it a listing of its shares on the main board, Nio said.

The fact that Nio is not issuing new shares means that existing shareholders' holdings will not be diluted, Caijing quoted Gui Lingfeng, director of Kearney Management Consulting Greater China, as saying, adding that an additional exchange means more investors with different backgrounds and can help diversify regional risk and increase trading activity.

"Nio's competitors have pushed or are pushing for dual listings, so a dual listing or a fast listing is seen as politically correct and valued by domestic and international investors," Gui said.