Top 5 EV News CHJ Leading files IPO prospectus in the USA

By Wynand Goosen | Jul 13, 2020

CHJ Leading files IPO prospectus in the USA

CHJ Automotive's EV brand, Leading Ideal Motors, submitted a prospectus to the United States SEC for an IPO on the NASDAQ. The Chinese EV startup is targeting to raise $100 million and have the stock code “LI.” The funds raised will be mainly used for new product development, capital expenditure, including production equipment, and working capital.

CHJ Leading Ideal Motors revealed that it plans to launch a full-size SUV in 2022, which will be equipped with a new-generation range-extending system. The CHJ Leading Ideal One SUV surprised the market with a successful launch, already selling over 10,000 units. According to the prospectus, the company sold 2869 vehicles in Q1 in 2020, generating 850 million yuan, which equaled a gross profit of 68.3 million yuan (8% profit margin).

The financial information in the prospectus shows that the startup showed a net loss of US$344 million in 2019 and US$10.89 million for Q1 2020. Leading Ideal holds cash and cash equivalents of US$149 million. The shareholding structure is divided into two classes of shareholding, Class A shares, and Class B shares. Class A shares correspond to 1 vote, and Class B shares correspond to 10 votes. Class A shares cannot be converted into Class B shares, and Class B shares can be converted into Class A shares. Currently, CEO and founder Li Xiang is the largest shareholder, holding 115,812,080 Class A shares, 240,000,000 Class B shares, 25.1% of the shares, and 70.3% of the voting rights. Wang Xing and Meituan hold 332,664,073 shares Class A shares hold 23.5% of the shares and have 9.3% of the voting rights.