Shares of the Li Auto Inc. (LI) stock were climbing in the pre-market trading session on Wednesday, July 28, 2021, after facing the drop in the last trade. LI stock price saw a push of 7.29% to reach $28.41 a share at the time of this writing. The stock went down by 13.94% at the previous closing. Let’s understand the reason behind this bull.
What’s happening?
Li Auto Inc is the developer and manufacturer of smart electric sport utility vehicles in the People’s Republic of China. There is no major LI stock-related news in today’s date to support the bullish sentiment. No analysts’ upgrades or increased targeted per share price of LI stock has been in the news to justify the rally. It seems that most of the Chinese electric vehicle stocks like Nio, XPeng Motors, and Li Auto are on the rise after a broader sell-off of the U.S-listed Chinese technology companies in the previous trade.
Positive News for LI stock from Hong Kong:
Hong Kong stock exchange has shown the green light to the LI stock to be listed in the city. It seems that the Li auto is following its rival stock XPeng that completed the share sale in June 2021. The experts think that the LI stock can generate between $1 billion to $2 billion from the listing.
The crackdown by the Chinese Government:
You can’t ignore the fact that the Chinese government is imposing strict regulation on Chinese technologies stocks listed on the U.S stock exchange. Previously in this month, the Chinese government has launched a cybersecurity review and made it compulsory for the Chinese stocks that are planning to be listed in foreign countries to undergo cybersecurity review.
On Tuesday, July 27, 2021, the Chinese media reported that China’s regulators will discuss the new laws in the upcoming month for the former colonial territories. It is not clear what kind of laws, the Chinese regulators will impose. Chinese government crackdown is spread to different areas from food deliveries to the for-profit education sector.
LI stock Q2 Sales View:
Li Auto delivered 7,713 Li-One SUVs in June 2021, which is 78.4% higher than the sales in May 2021 and 321% higher than the deliveries reported a year ago. The second-quarter deliveries were 17,575 representing 166% high as compared to the previous year’s sales. The sales target for the second quarter was between 14500 t o15500.
Wrap Up:
Li Auto is rising today amid the strict crackdown by the Chinese government these days. The performance of the stock indicates that it is progressing with time.
