(Yicai Global) Oct. 21 -- Shares of the electric vehicle arm of China’s second-biggest property developer surged for a second day in Hong Kong after the firm launched the pre-listing tutoring procedure for its secondary offering in Shanghai.

China Evergrande New Energy Vehicle Group [HKG: 0708] closed 11.5 percent higher today at HKD26.10 (USD3.37), after earlier climbing as much as 12.8 percent. The shares gained 9.6 percent yesterday. The carmaker now has a market capitalization of HKD230 billion (USD29.7 billion), which is HKD30 billion more than its parent company China Evergrande Group. 

Evergrande NEV hired Haitong Securities on Sept. 22 to handle the so-called pre-listing tutoring procedure, the first step towards listing on the Nasdaq-style Star Market which has now been completed, China’s securities regulator said yesterday. The tutorial stage normally takes about two months on other bourses.

The Guangzhou-based company plans to issue about 1.56 billion shares, it said on Sept. 25. Most of the funds raised will be used to get six prototype vehicles unveiled in August to market. The rest will go to replenish working capital and finance daily operations.

Evergrande NEV raised HKD4 billion (USD516 million) through a private share placement last month. Buyers included internet behemoth Tencent Holdings, ride-sharing giant Didi Chuxing Technology and private equity firms Sequoia Capital and Yunfeng Capital.

Previously known as Evergrande Health Industry Group, the firm’s healthcare services still account for 98 percent of revenue, according to its first-half earnings report. Revenue jumped 70 percent from a year earlier to CNY4.5 billion (USD677.5 million) in the six months through June, while income from its auto business slumped 81 percent to CNY53 million (USD8 million).

“The auto group will start to form a stable cash flow after 2022 once mass production begins and the parent company will no longer invest,” the carmaker said.

Evergrande Group invested CNY14.7 billion (USD2.2 billion) last year to support its foray into the new energy vehicle sector, and is set to spend the same amount again over the next two years. Most went on equity purchases, research and development, the acquisition of industrial land and building assembly lines, the firm said.

Editor: Kim Taylor