China's Momenta considers shifting IPO to Hong Kong from New York, sources say

(Reuters) -Chinese autonomous driving developer Momenta is considering shifting its IPO to Hong Kong from New York, four people said, adding to a growing list of Chinese companies opting to debut in the Asian financial hub amid heightened U.S.-China tensions.

The potential change in Momenta's listing venue comes after the expiration in June of an approval by China's securities regulator to list in the U.S., which was granted mid-last year, according to the regulator's website.

Momenta is a leading Chinese supplier of advanced driving assisted system features, akin to Tesla's self-driving technology that can navigate urban traffic under human drivers' supervision.

The company recently informed some of its investors about its plan to potentially list in Hong Kong in 2026, two of the people said, adding the plan, which has not been reported previously, is at an early stage and is subject to changes.

Momenta, backed by investors such as Toyota Motor and auto parts supplier Bosch, is considering a change in listing venue as it nears completion of a pre-IPO fundraising round, said two of the people.

One of them said the round is expected to involve investors, including Mercedes-Benz and Hyundai.

Details of the IPO, such as the timeline, offering size and valuation are yet to be finalised, the people said.

All the sources declined to be identified as the plan is not public yet.

Momenta said it has not made any final decision regarding IPO plans, including the listing venue.

"Any suggestion that Momenta has informed investors of a confirmed plan to list in Hong Kong in 2026 is untrue," the company said, adding it has not announced or confirmed any pre-IPO fundraising round or its participants.

Hong Kong Exchanges and Clearing Ltd (HKEX), the city's exchange operator, declined to comment on individual companies.

The China Securities Regulatory Commission (CSRC) did not respond to Reuters request for comment on Momenta's potential shift of the listing venue.

Mercedes-Benz didn't respond to a query for comment. Hyundai said there is "a compelling use case" to collaborate with Momenta in China for its robust autonomous driving tech, without elaboration.

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The possible shift in Momenta's listing venue underscores Hong Kong's position as the primary offshore fundraising venue for Chinese companies amid U.S. lawmakers' threat to delist Chinese firms from American exchanges.

Heightened trade tensions between China and the United States have also prompted a growing number of Chinese companies to favor Hong Kong for listings over the past year.

Hong Kong, fueled by the influx of Chinese companies, has emerged as the top global bourse by volume of IPOs and second listings combined so far this year, overtaking its biggest rival - the New York Stock Exchange, according to data from LSEG.

According to HKEX, over 230 companies have filed publicly for initial or second listings in the city as of Thursday.

The city has seen total funds raised from such offerings, predominately by Chinese companies, reach about $20 billion so far this year, exceeding $11.3 billion in all of 2024, LSEG data showed.

By contrast, China companies have raised just $776 million through initial and second listings in the U.S. so far this year, with tea chain Chagee Holdings' $473 million IPO being the largest such offering.

Founded by former Microsoft employee Cao Xudong in 2016 in China, Momenta has been making forays into overseas markets and has a research centre in Stuttgart, Germany.

It will begin tests of level 4 autonomous vehicles in Germany next year with Uber. Its advanced driver assistance systems are used by global brands including Toyota, Mercedes-Benz, and Audi in China.

Chinese suppliers such as Momenta, lidar maker Hesai and battery giant CATL are becoming primary providers of key technologies and selling points for smart electric vehicles, which are reshaping car development.

(Reporting by Reuters staff; Editing by Sumeet Chatterjee and Kim Coghill)