Li Auto Inc. Funds Chip Subsidiary With RMB1.625B

Li Auto's chip subsidiary, MHX Technology, raised $242.8M in equity financing. Li Auto and external investors contributed $158.2M and $84.6M, respectively, according to the company.

Li Auto's chip unit, MHX Technology, secured 1.625 billion yuan in equity financing. Li Auto will invest 1.0 billion yuan, while external investors will contribute 625 million yuan. The deal includes a potential additional 500 million yuan investment by Hangzhou Jingtao. MHX Technology will use the funds for R&D and commercialization, with share incentive plans to attract talent. Li Auto will maintain control of the subsidiary. The financing is subject to customary closing conditions.

Li Auto's stock surged 7.5% to $11.72 in morning trading, driven by a broad rally in U.S.-listed Chinese EV stocks and a supportive analyst stance. The Nasdaq Golden Dragon China Index climbed over 2%, with peers Xpeng and NIO also advancing. CGS International reaffirmed its Buy rating, and the consensus price target is around $15. The broader market recovery and anticipation of Li Auto's European debut contributed to the gain.

12 listed automakers reported overseas sales accounting for over 35% of their totals, with Chery Automobile (09973.HK) at 70.3%. All missed annual targets, with completion rates below 67%. SAIC Motor (600104.SS) led sales, while BYD (002594.SZ) saw a 3.94% decline. Leapmotor (09863.HK) grew fastest, while Li Auto (02015.HK) underperformed. Industry faces price wars and overseas expansion challenges.

Li Auto's Hong Kong shares fell 4% to a record low of HK$43.02 after reporting a 6.3% year-on-year decline in September deliveries to 31,817 vehicles, despite launching new models. The company faces stiff competition and slowing domestic demand, prompting expansion into foreign markets. The broader Hong Kong market also declined.

Li Auto (HKEX:2015) is spinning off its Mach M100 chip business, which produces a 5nm chip with 1,280 TOPS. The company is seeking external customers for its automotive chips, silicon-carbide modules, and range extenders. Its 70%-owned silicon-carbide unit is also seeking external funding and preparing for a potential IPO.