By Scott Murdoch
HONG KONG (Reuters) – Chinese electric car maker Zhejiang Leapmotor Technology is set to raise $800 million by pricing its shares at HK$48 ($6.12) per share in its Hong Kong initial public offering, two people familiar with the matter said. of the matter.
While that’s less than $1.03 billion, the electric car maker said it was aiming to ramp up regulatory filings last week, its initial public offering will remain the city’s largest this year. It had planned to raise $1.5 billion but cut the volume after a lukewarm response from investors.
The sources spoke on condition of anonymity because pricing information was not public. Leap Motor did not immediately respond to a Reuters request for comment outside of business hours.
The price disclosed on Sunday is at the bottom of the range from HK$48 to HK$62 per share, which Leapmotor has set for a 130.82 million-share deal.
One of the sources said that potential investors have reduced their orders amid volatility in global financial markets.
In the US, it fell 4.7% last week as the Federal Reserve raised interest rates and markets remained concerned about rising inflation. Hong Kong fell 4.4%, the worst in 10 weeks.
Headquartered in Hangzhou, Leapmotor produces four electric vehicle models primarily targeting the mid- and low-end mass market in China in a price range of 79,500 to 300,000 yuan ($11,500 – $43,000), according to its website and prospectus submitted to the Hong Kong Stock Exchange.
It plans to use the IPO funds for research and development and to boost its production capacity and sales network, according to regulatory filings.
Chinese battery maker CALB is raising up to $1.7 billion in an initial public offering, according to a company statement, in a deal that would overtake Leapmotor and make it the largest new stock sale in Hong Kong in 2022.
Hong Kong IPO volumes are down nearly 90% as global markets continue to be affected by Chinese regulatory uncertainty, high interest rates, high inflation and the Russian war in Ukraine.
Despite deals from Leapmotor and CALB, as well as China Vanke’s Onewo real estate services unit that raised $733 million, dealmakers are warning there will be a strong rebound in new-share sales in Hong Kong and beyond before 2023.
“She feels these IPOs are some kind of one-time deal and he believes the Hong Kong market is not yet fully open,” said Shivara Samsudin, a LightStream Research analyst who publishes on Smartkarma.
“Most deals have been cut back,” she said. “There have been long gaps between pre-marketing audio approval and listing, all of which indicate that the market is not yet back to normal.”
(1 dollar = 7.8493 Hong Kong dollars)