Shares of XPeng (NYSE:XPEV) stock opened in the green following news that the Chinese electric vehicle (EV) company will be added to the Hang Seng TECH Index on March 7. The index consists of the 30 largest technology companies in Hong Kong. In the past year, the index has fallen by about 22%, bringing its five-year loss to almost 29%.
Still, past returns of the index have no bearing on XPEV stock. Furthermore, the addition of the company means that the index will have to purchase shares of the XPEV. It also means that the price of XPeng will be partially affected by the price of the index.
All in all, this is great news for shareholders. Other members of the index include some of China’s most recognized companies, such as Nio (NYSE:NIO), Baidu (NASDAQ:BIDU) and Tencent (OTCMKTS:TCEHY).
XPEV Stock to Join the Hang Seng TECH Index
The TECH Index is tradable through the Hong Kong Stock Exchange (HKG) with the ticker 3032. CEO He Xiaopeng made no attempt to hide his excitement about the index addition, adding:
“We are particularly proud of being one of the first to join this Index as an ‘Autonomous’ technology theme. To be chosen as part of one of the most recognized Hong Kong stock market indices reinforces our vision of transforming smart mobility with technology and our strategy to bring the most sophisticated technologies to a broad base of customers.”
If that wasn’t good enough, XPEV will also be added to the Hang Seng China Enterprises Index on March 13, replacing CHINA FEIHE. The index uses a free-float cap-weighted strategy and has a total of 50 constituents.
At the same time, 2023 has presented a rough start for Chinese EV companies. In January, XPeng’s deliveries totaled just 5,218 EVs, compared to 11,292 deliveries during the prior month. This was largely attributed to the Lunar New Year holiday and the expiration of purchase subsidies. Along with the deliveries, XPeng also announced the imminent release of its new P7 smart sedan, which is currently available for order in several European countries.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.