Two new listings stumbled of their Hong Kong buying and selling debuts after elevating a complete of $1.5 billion in tumultuous market circumstances, casting a cloud over a rising pipeline of firms getting ready to go public within the Asian monetary hub.
Shares of Zhejiang Leapmotor Know-how Co., a Chinese language electric-vehicle maker, fell as a lot as 42% under their preliminary public providing value inside their first few hours of buying and selling on Thursday. The seven-year-old firm raised $800 million in its IPO—considerably lower than the $1.5 billion it had beforehand aimed for—after pricing its shares on the backside of a guided vary.
The shares had been at 31.35 Hong Kong {dollars} apiece, equal to $3.99, in afternoon buying and selling, versus their HK$48 IPO value.
Onewo Inc., a property-management companies supplier managed by big real-estate developer
China Vanke Co.
, fell shut to eight% under its IPO value in early Thursday buying and selling. The corporate’s itemizing raised near $734 million after the deal priced on the midpoint of its provided vary.
The 2 firms’ IPOs had been amongst Hong Kong’s largest this 12 months however passed off throughout a broader market selloff. The town’s benchmark Dangle Seng Index is at its lowest in about 11 years, after the U.S. Federal Reserve hiked interest-rates once more to fight excessive inflation.
New and secondary listings in Hong Kong have raised $10.6 billion this 12 months, in contrast with $37.1 billion in the identical interval in 2021, based on Dealogic. The IPO market has lately begun to thaw, and dozens of firms are shifting ahead with their itemizing plans. They embody battery maker CALB Co., insurer FWD Group Holdings Ltd. and EV maker WM Motor Holdings Ltd.
Particular person traders in Hong Kong, who in years previous have swarmed into well-liked IPOs, confirmed little curiosity within the latest offers.
The retail portion of Leapmotor’s inventory providing was undersubscribed, the corporate stated, and acquired functions for $13 million value of shares—a couple of sixth of what it tried to promote to them. Onewo fared barely higher; the corporate stated the retail portion of its providing was 82% subscribed.
Each firms stated there was extra demand for the bigger, worldwide parts of their IPOs. Leapmotor stated that portion of its providing was greater than two instances subscribed.
5 so-called cornerstone traders, together with Chinese language state-run funding funds, purchased roughly $300 million of Leapmotor’s IPO shares and agreed to carry them for at the least six months. In Onewo’s IPO, six cornerstone traders purchased roughly 38% of the whole shares on provide. They included Chinese language state-owned entities in addition to models of
and Singapore state-investment firm Temasek Holdings.
Hangzhou, China-based Leapmotor joins an more and more crowded area of publicly listed Chinese language EV makers, which embody
BYD Co.
,
Li Auto Inc.,
NIO Inc.
and
XPeng Inc.
The nation’s alternative-energy automobile market is increasing quickly, helped by favorable insurance policies geared toward boosting new EV gross sales over conventional combustion-engine autos. However a lot of its homegrown auto makers are racking up losses whereas coping with supply-chain disruptions and rising prices of batteries and different uncooked supplies.
Write to Dave Sebastian at dave.sebastian@wsj.com
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