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HONG KONG, Sept 25 (Reuters) – Chinese electric vehicle (EV) maker Zhejiang Leapmotor Technology is set to raise $800 million by offering its shares in its Hong Kong initial public offering (IPO) at HK$48 each (June 6). $.12), two sources with direct knowledge of the matter said.
While that’s less than the $1.03 billion the EV maker hoped to raise in its regulatory filings last week, the IPO would still be the city’s biggest this year. It had planned to raise $1.5 billion but scaled back after a lukewarm response from investors.
The sources spoke on condition of anonymity as the pricing information was not public. Leapmotor did not immediately respond to a Reuters request for comment after business hours.
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The prices announced on Sunday are at the lower end of the range of HK$48 to HK$62 per share that Leapmotor has set for the 130.82 million share deal.
Potential investors reduced their orders amid volatility in global financial markets, a source said.
In the United States, the S&P500 (.SP500) fell 4.7% last week as the US Federal Reserve hiked interest rates and markets remained concerned about high inflation. Hong Kong’s Hang Seng Index (.HSI) fell 4.4%, its worst reading in 10 weeks.
Hangzhou-based Leapmotor is producing four EV models primarily targeting China’s middle and lower-end mass market in a price range of 79,500-300,000 yuan ($11,500-$43,000), according to its website and prospectus filed with the Hong Kong Stock Exchange.
It plans to use the IPO funds for research and development and to strengthen its production capacity and distribution network, official documents show.
Chinese battery maker CALB is raising as much as $1.7 billion in an IPO, according to a company statement, in a deal that would eclipse Leapmotor and make it Hong Kong’s biggest new share sale of 2022.
Hong Kong IPO volume is down nearly 90% as global markets continue to be rocked by regulatory uncertainty in China, rising interest rates, high inflation and Russia’s war in Ukraine.
Despite the Leapmotor and CALB deals, as well as China Vanke’s real estate services unit Onewo Inc raising $733 million, dealmakers are wary of a solid recovery in Hong Kong and overseas new share sales ahead of 2023 .
“It believes that these IPOs are a one-off transaction of sorts and that the Hong Kong market is not yet fully open,” said Shifara Samsudeen, an analyst with LightStream Research, which publishes on Smartkarma.
“Most of the deals have been downsized,” she said. “There have been long gaps between a hearing permit, pre-marketing and listing, all of which indicate the market has not yet returned to normal.”
($1 = 7.8493 Hong Kong dollars)
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reporting by Scott Murdoch; Edited by Himani Sarkar and William Mallard
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Scott Murdoch
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