Last week, the Chinese ride-hailing giant DiDi Global (DIDI) declared that it would delist from the New York Stock Exchange. The news of DIDI’s delisting heightened investor concerns about other U.S.-listed Chinese stocks, and the prices of shares of Chinese electric vehicle stocks NIO (NIO), XPeng (XPEV), and Li Auto (LI) declined in the wake of DIDI’s delisting announcement. Considering the bleak growth prospects of these companies, we think investors are better off avoiding them. Read on.Beijing-based ride-hailing giant DiDi Global Inc. (DIDI) declared last week that it would delist from the New York Stock Exchange “immediately” and begin preparations for a separate listing in Hong Kong. Consequently, the U.S. shares will be converted into “freely tradable shares” on another international exchange. Shares of DIDI declined sharply in price after the announcement.
With DIDI’s delisting, the decades-long, trillion-dollar relationship between China and Wall Street may be coming to an end. The move raised further speculation regarding Chinese EV stock listings moving to Hong Kong. This would leave U.S. investors trading ADRs with underlying stocks in the ADRs being Hong Kong-listed.
Amid the rising uncertainties, we believe investors are better off avoiding Chinese electric vehicle stocks NIO Inc. (NIO), XPeng Inc. (XPEV), and Li Auto Inc. (LI). The shares of these companies plunged last week on the news of DIDI’s delisting.