On September 25 (Beijing Time), Chery Automobile, the veteran Chinese automaker headquartered in Wuhu, Anhui Province, made its long-awaited debut on the Hong Kong Stock Exchange under the ticker 09973.HK.

Chery's path to the capital markets has been arduous. This successful Hong Kong listing marks a significant milestone in its enduring quest to access capital markets.

Chery Automobile opened at HK$34.20 on its first trading day. The issue price stood at HK$30.75, and it soared to HK$34.98 at the opening bell, surging over 13% at one point, and pushing its market capitalization past HK$200 billion.

Ultimately, Chery's stock closed its first day of trading at HK$31.92, up 3.80% from the issue price. While this closing gain was nearly 10 percentage points lower than the opening surge, the day's turnover rate reached 3.38%, with trading volume hitting HK$2.6 billion.

Chery's Hong Kong IPO stands as the year's largest automotive listing on the Hong Kong stock market, raising HK$9.14 billion. After deducting estimated listing expenses of HK$266 million (calculated at the final offering price), net proceeds amounted to HK$8.879 billion.

Chery's listing attracted a stellar lineup of cornerstone investors:

JSC International Investment Fund SPC, HHLR Advisors, Ltd, Shanghai Jinglin, CICC Financial Trading Limited, Hong Kong Jinglin, Huangshan Construction, Jinghui Ruiying, Horizon Together, Dajia Renshou, Martis Fund, Guoxuan Hong Kong (presumably an affiliate of Guoxuan High-Tech), Hefei Jianhui, China Post Wealth Management, Xingyu Hong Kong, and other institutions.

In terms of subscription demand, Chery's Hong Kong public offering was oversubscribed 308.18 times, while its international offering saw 11.61 times oversubscription. The final issue price was set at the upper limit of HK$30.75.

This is how Chery Automobile, a venerable Chinese brand, has fared in the capital markets.

To understand Chery's prospects, we must examine its fundamentals.

Based on today's closing price, Chery Automobile's price-to-earnings (PE) ratio stands at 10.80.

In terms of performance, Chery's new energy vehicle (NEV) sales surged by 265% year-on-year in 2024, with overseas revenue contributing 39.7% of total revenue. Net profit for the first quarter of 2025 jumped 90.9% year-on-year to reach 4.726 billion yuan.

Notably, Chery achieved over 25% growth in fuel vehicle sales, NEV sales, and domestic and overseas sales in 2024. It has also maintained its position as China's top exporter among independent brands for 22 consecutive years.

A comparative analysis with other Hong Kong-listed automakers reveals that Great Wall Motor's PE is 10.95, Geely Automobile's PE is 11.52, BYD Automobile's PE is 21.89, Li Auto's PE is 25.35. Meanwhile, XPeng Motors, Leapmotor, NIO, Dongfeng Motor Group, and others are still incurring losses.

The question now is what valuation multiple the capital markets will assign to Chery Automobile.

From a business standpoint, Chery Automobile boasts unique strengths. Overseas revenue accounts for nearly 40% of its total, and it has achieved rapid growth in both NEVs and fuel vehicles. Chery Automobile and Chery Group are actively investing in intelligence, including the development of proprietary intelligent driving systems. For instance, all 2025 models will be equipped with Falcon Intelligent Driving, akin to BYD's Tian Shen Zhi Yan. Additionally, Chery has collaborated with Huawei to launch the Zhijie brand, elevating its strategic importance within the group.

Chery Automobile undoubtedly aspires to command valuations in line with the NEV and intelligent vehicle sectors. Whether the capital markets will embrace this vision remains to be seen.

A private equity investor friend suggested that Chery's stock could potentially double. From a valuation perspective, this would imply a PE ratio around 21.60, approaching that of BYD Automobile.

Whether Chery can reach this level or benefit from additional valuations derived from overseas markets remains uncertain.

Nonetheless, the valuation of Chery Automobile could still climb higher.