September 3, 2024 Hong Kong
In a decisive move to strengthen market confidence, Chinese electric vehicle (EV) manufacturer Leapmotor announced today that major shareholders, including Chairman and CEO Xu Jangming, alongside key investors Fuen and his spouse, are set to increase their holdings in the company. This announcement follows a similar strategic investment by He Xiaopeng, the CEO of rival EV maker Xpeng, whose recent acquisition of additional shares has sent Xpeng’s stock soaring.
According to a statement released by Leapmotor through the Hong Kong Stock Exchange, Xu Jangming and the Fu couple plan to invest up to 300 million yuan (approximately $42 million) in additional shares within the next six months. This significant investment aims to reinforce their commitment to Leapmotor’s long-term success and promote the company’s sustainable, stable, and healthy development. The announcement also highlighted that this move is intended to safeguard the interests of public investors, who have witnessed a decline in the company’s stock performance in recent months.
As of today, Leapmotor’s shares have experienced a 3.74% drop, closing at HKD 119.54, marking a sharp 43% decline year-to-date. This downturn reflects broader challenges faced by Chinese EV manufacturers, where macroeconomic pressures and intense competition have significantly impacted stock prices.
Currently, Xu Jangming, the Fu couple, and their broader shareholder group hold a substantial portion of Leapmotor’s shares. Specifically, they control 185,271,538 H shares and 128,057,839 domestic shares, which together account for 23.47% of the company’s total issued shares. This significant shareholding underscores their vested interest in ensuring Leapmotor’s success and stability amidst a volatile market environment.
The announcement of the planned share purchase by Leapmotor’s major shareholders comes shortly after a similar move by Xpeng CEO He Xiaopeng, who made headlines with his own substantial investment. Between August 21 and 23, He Xiaopeng acquired a total of 1 million Class A ordinary shares of Xpeng in the Hong Kong market. Additionally, through his wholly-owned entity Galaxy Dynasty Limited, He purchased 1,049,921 American Depositary Shares (ADS). This show of confidence in Xpeng’s prospects had an immediate positive impact, with the company’s shares jumping by 7% in Hong Kong, closing at HKD 29.50. Similarly, Xpeng’s U.S.-traded ADSs saw a 6.7% increase, reaching $7.48.
The parallel actions by the leadership of both Leapmotor and Xpeng underscore a broader trend among Chinese EV manufacturers, who are facing mounting pressures due to a challenging macroeconomic landscape and intensifying competition within the industry. Despite ongoing innovation and growth in the EV sector, Chinese EV stocks have suffered significant declines this year. For instance, NIO’s U.S.-listed shares have plummeted by approximately 56% year-to-date, while Li Auto on the NASDAQ has experienced a steep 45% decline over the same period.
These stock performance woes reflect broader uncertainty and headwinds facing the Chinese EV market as companies grapple with slowing economic growth, supply chain disruptions, and increased competition from both domestic and international players. As a result, leaders like Xu Jangming and He Xiaopeng are stepping in with personal investments to signal their unwavering confidence in their companies’ futures. This move is not just about bolstering stock prices in the short term but also about reaffirming their commitment to driving long-term value for shareholders and positioning their companies to navigate the challenges ahead.
The decision by Leapmotor’s top executives and major shareholders to increase their holdings is a strategic response to the current market challenges, aimed at reinforcing confidence and securing the company’s future growth. As the EV market continues to evolve, the actions of these leaders will likely play a critical role in shaping the trajectory of their companies and the broader industry.