Shares of Leapmotor and Onewo open sharply lower on Hong Kong debut

  • Leapmotor shares open 14.5% lower than IPO bid price
  • Onewo shares down more than 7% at the opening
  • CALB values ​​shares at HK$38 each – sources

HONG KONG, Sept 29 (Reuters) – Hong Kong’s two largest IPOs of 2022, worth a combined $1.5 billion, opened sharply lower in their debut on Thursday, darkening the outlook a resumption of commercial activity in the city for the rest of the year. .

Shares of Chinese electric vehicle (EV) maker Zhejiang Leapmotor Technology opened at HK$41 ($5.22) apiece, down 14.5% from the IPO price of HK$48.

The stock then plunged to HK$32.20.

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Shares of Onewo Inc (2602.HK), the real estate services arm of developer China Vanke Co Ltd (000002.SZ), fell more than 7% at open from their IPO price of HK$49.35.

Hong Kong’s Hang Seng Index (.HSI) opened almost 2% higher.

Leapmotor raised $800 million, while Onewo raised $733 million through its initial public offerings (IPOs).

These are the largest IPOs in the city in 2022, where trading volumes have fallen sharply amid COVID-19 restrictions, geopolitical tensions, soaring inflation and rising interest rates in many parts of the world.

Lithium battery maker CALB is finalizing its $1.28 billion Hong Kong IPO and has priced its shares at HK$38 each, according to two sources with direct knowledge of the matter.

CALB did not immediately respond to a request for comment.

IPOs in the city have raised just $7.94 billion so far this year, the worst annual figure since 2012, compared to $37.1 billion during the same period in 2021, according to the data from Refinitiv.

BAD STARTS TOOTH FEELING

After the poor start, major new IPOs are unlikely before the end of 2022, traders said, as investors remain cautious given global market volatility.

“Weak sentiment in the secondary market has not yet normalized,” Ke Yan, senior analyst at DZT Research, which publishes on Smartkarma, told Reuters.

“The key issue for future IPOs in Hong Kong will be the tug of war between companies and investors over valuation, and that could go on for a long time.”

The IPOs of Leapmotor and Onewo received a lukewarm response from retail investors in the city who did not accept the full amount of shares offered to them, according to filings by the companies.

The electric vehicle maker had planned to raise as much as $1.5 billion, sources told Reuters, but later cut it to $1 billion.

Leapmotor shares were valued at the bottom of its marketed price range, while Onewo shares were valued in the middle of its stated price range.

The Hang Seng index (.HSI) fell 3.4% on Wednesday, the most since May, to end at the lowest level in more than a decade, as rising borrowing costs heightened fears of a global recession.

The index lost around 25% in 2022, while the technology index (.HSTECH) lost 36.6%. Read more

($1 = HK$7.8498)

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Reporting by Scott Murdoch; Editing by Himani Sarkar

Our standards: The Thomson Reuters Trust Principles.

scott murdoch

Thomson Reuters

Scott Murdoch has been a journalist for over two decades and works for Thomson Reuters and News Corp in Australia. He has specialized in financial journalism for most of his career and covers equity and debt markets across Asia from Hong Kong.

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