Chinese EV maker Leapmotor tumbles in Hong Kong trading debut

CHINESE electric-vehicle maker Zhejiang Leapmotor Technology slumped in its first day of trade in Hong Kong, joining a slew of listings this year that fell below their offering price in their debut.

The shares declined as much as 15 per cent to HK$41.00. They were sold at HK$48 apiece, the bottom of the marketed range in an offering that raised about HK$6.3 billion (S$1.2 billion).  

The Hangzhou-based firm is debuting in the Asian financial hub during a grim week for equities trading globally, with volatility jumping after hawkish comments from Federal Reserve policymakers and a surge in Treasury yields. The Hang Seng Index is down about 13 per cent in September, with major benchmarks across Asia also retreating.

As of Wednesday (Sep 28) , half of the 16 firms that listed in Hong Kong this year after offerings that raised more than US$100 million ended their first session below water, 3 were unchanged and 5 rose above their listing price, Bloomberg data show.

The portion of Leapmotor shares reserved for individuals in the initial public offering (IPO) was lower than the amount offered, while those set aside for funds were “moderately” oversubscribed, according to a statement to the exchange this week.

Leapmotor is part of an industry that has largely escaped the scrutiny of Chinese regulators, whose spotlight has hobbled the nation’s broader technology sector and put a damper on share sales overseas. EV makers are seen as an important component of the country’s push towards electrification and clean energy.

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Five cornerstone investors, including Zhejiang Industrial Fund and Jinhua Industrial Fund, agreed to purchase around US$308.5 million of the company’s stock. Leapmotor is planning to use the IPO proceeds for business expansion and brand awareness promotion, according to the prospectus.

JPMorgan Chase & Co, China International Capital, Citigroup and CCB International Holdings are joint sponsors of Leapmotor’s IPO. BLOOMBERG