By Kimberley Kao
Li Auto shares rose after the Chinese automaker said it plans to buy back up to $1 billion of its shares over the coming year.
The stock rose as much as 5.5% in Hong Kong early Wednesday and was recently 3.4% higher at 69.90 Hong Kong dollars, equivalent to US$8.93. Li Auto's American depositary receipts closed 3.6% higher overnight.
The electric-vehicle maker said late Tuesday that it expects to fund the repurchases with its existing cash balance.
"The share-repurchase program reflects our strong confidence in Li Auto's strategic roadmap and future value creation, and will ultimately benefit the company and create value for our shareholders," said Chief Executive Xiang Li.
The board will review the buyback plans periodically and may authorize adjustments of its terms and size, the company said.
Li Auto earlier this month posted a sharp drop in quarterly profit as it struggled to make headway in a highly competitive sector. The plug-in hybrid specialist remains one of the few Chinese EV makers to have turned a profit.
While the Chinese automaker's ADRs have been relatively flat year to date, suggesting near-term headwinds are largely priced in, a meaningful vehicle volume recovery in the first half of this year is likely limited, HSBC analysts said in a recent note.
"New model launches may improve the trading backdrop next quarter, but it remains uncertain whether Li Auto can convert the current product cycle into sustained gains in volume, mix and profitability," the analysts said.
Write to Kimberley Kao at kimberley.kao@wsj.com
(END) Dow Jones Newswires
03-24-26 2331ET
