The Business Times

China EV maker Leapmotor launches up to US$1b Hong Kong IPO

Published Tue, Sep 20, 2022 · 04:07 PM

CHINESE electric vehicle maker Zhejiang Leapmotor Technology is aiming to raise US$1.03 billion (S$1.5 billion) in a Hong Kong initial public offering (IPO), according to regulatory filings, that would be the largest in the city in 2022.

The company is selling 130.82 million shares in the deal that will be sold in a price range of HK$48 to HK$62 each, the filings showed.

Leapmotor’s deal comes as China Vanke’s property services group Onewo Space-Tech Service is in the market raising up to US$733 million in its IPO that was launched on Monday (Sep 19). Onewo had hoped to raise US$2 billion but scaled back the size of its IPO.

The 2 deals are the largest in Hong Kong since February and dealmakers hope a positive response could prompt more IPOs before the end of the year.

Bankers and lawyers remain pessimistic though about a major bounce back in IPOs as China-US tensions remain high, the Russia-Ukraine war still exists and inflation stays stubbornly high in most parts of the world.

Leapmotor had planned to raise US$1.5 billion but reduced the size of the deal after a lukewarm response from investors, sources previously told Reuters.

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The IPO was paused a fortnight ago following the company’s initial briefings with potential investors while financial markets were volatile, the sources said.

The company will have a market capitalisation of US$6.99 billion to US$9.03 billion based on the price range flagged to investors.

Final pricing of the shares is due to occur on Friday and the stock will start trading on Sep 29.

Leapmotor has locked in 5 cornerstone investors - led by the Zhejiang and Jinhua industrial funds - who will buy up to US$308.33 million shares, according to the filings.

Leapmotor produces 4 electric vehicle models that mainly target China’s middle- and lower-end mass market in a 79,500 yuan-300,000 yuan (US$11,466.40-US$43,269.44) price range, according to its website and prospectus filed with the Hong Kong Stock Exchange.

The company was ranked 12th in terms of sales in the first 7 months among all EV makers in China, with a market share of 2.3 per cent, according to data from the China Passenger Car Association.

The majority of the cash raised will be used for research and development and expanding production capacity, the filings showed. REUTERS

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