(ATF) Chinese electric vehicle (EV) firm Nio was boosted by a ‘buy’ rating from Nomura that drove another 6% rise in its Nasdaq stock price on Friday January 22, while property firm Evergrande raised $3.4 billion to join the EV rush on Sunday.
Nomura initiated coverage of electric vehicle firm Nio with a bullish report that gave another boost to one of the most widely traded Chinese stocks.
Nio saw its Nasdaq share price rise to touch $65 before closing the day up by around 6% at $62. That gives Nio a market capitalisation of $96.6 billion, with every chance of breaching $100 billion soon.
Nomura hailed Nio’s “Tesla-like top-down approach in launching its EV pipeline” with relatively expensive products such as its ES8 model, as it gave a price target just over $80, and help to drive another rally in the Nio share price.
The comparison with Tesla – which now has a market cap of just over $800 billion – helps to explain the most recent uptick on heavy trading volume of Nio’s shares.
The frenzied appetite for stock in EV firms that seem to have a viable path to future sales growth also helps to explain why companies with little obvious expertise in the sector are trying to crash the party.
Troubled Chinese property firm Evergrande’s Hong-Kong listed electric vehicles firm said on Sunday it would bring in six new investors to raise HK$26 billion ($3.4 billion) to fund technology research and repay debt, for example.
China Evergrande New Energy Vehicle Ltd will issue 952.4 million shares at HK$27.3 each to new investors who include China Gas chairman Liu Minghui and Chan Hoi-wan, spouse of China Estate shareholder Joseph Lau, the firm said, according to Reuters.
The price offers a 9% discount to Friday’s close of HK$29.90, the company said in a filing.
The other four new investors are Cosmic Success Holdings Ltd, Upper World Ltd, Heyirong International Trade Co. Ltd and Greenwoods Global Investment Ltd.
China Evergrande, the country’s most indebted property developer, has been scrambling for cash as Beijing plans new debt-ratio caps to tackle what it considers excessive borrowing in the real estate development sector.