Shares of Dongfeng Motor Group (HKEX: 00489) jumped nearly 6% at the close of trading in Hong Kong after receiving approval to list on Shenzhen's Nasdaq-like board, the ChiNext.
China’s third-largest vehicle maker, which hopes to raise 21 billion yuan ($3.1 billion) has gotten the green light to list its shares on the board of the Shenzhen Stock Exchange.
Dongfeng intends on using the proceeds for a next-generation car and an advanced technology development project. It also plans on using a chunk of the proceeds for a new energy passenger vehicle project and working capital.
On the news, shares of Dongfeng peaked at HK$5.38, nearly 8% higher from Tuesday’s close. The Wuhan-based firm, which has been listed in Hong Kong since December 2005, has struggled this year amid the coronavirus crisis, as its shares are down 28% year-to-date.
However, vehicle sales have been starting to rebound in China including its 50-50 joint venture with Nissan Motor (OTC: NSANY). The JV, known as Dongfeng Nissan, watched its vehicle sales surge nearly 9% year-over-year in September to 112,029 units, Nissan said earlier this week. That figure marked a record high in terms of sales volume in September.
In addition, the China Association of Automobile Manufacturers reported on Tuesday that total auto sales in the country leaped nearly 13% in September versus the same month last year.
In 2019, Dongfeng sold more than 2.9 million cars, giving the Chinese vehicle giant 11% of the market share in the nation. Also in the year, Dongfeng generated revenues of 104.7 billion yuan ($15.5 billion) on a net profit of 12.9 billion yuan. In the first half of 2020, Dongfeng’s earnings tumbled to 3 billion yuan ($437 million) compared with 8.5 billion yuan in the same period in the preceding year.