China's Leapmotor Is Set To Raise $800 Million In An IPO In Hong Kong

Sources say that Zhejiang Motor Technology, China's largest motor vehicle manufacturer, is poised to raise $800 millions in Hong Kong's Initial Public Offering (IPO). It has priced its shares at HK$48 ($6.12) per share. Although this sum is lower than the $1B the electric vehicle maker stated it would seek to raise in regulatory filings last Wednesday, it will still be the largest city share offering for the year.

The original goal was to raise $1.5 Billion, but the firm cut its size following a lackluster response from investors. Sources spoke under the condition of anonymity because pricing information was not publicly available. Leapmotor declined to comment.

Leapmotor set a range between HK$48 and HK$62 per share for the 130.82 million-share deal. Sunday's pricing was the lowest. One source claims that potential investors have cut back on their orders due to volatility in global financial markets.

The S&P 500 fell 4.7% in the United States last week, as the Federal Reserve raised interest rates and markets remained worried about high inflation. The Hang Seng Index in Hong Kong fell 4.4% last week, making it its worst performance in 10 weeks.

Based in Hangzhou, Leapmotor produces four EV models. They mainly target China's middle- and lower-end mass markets in 79.500-300,000. Yuan (11,500 - $43,000) price range according to the company's website and prospectus filed with Hong Kong Stock Exchange.

According to regulatory filings, it plans to use the IPO funds to research and develop, and increase its production capacity as well as expand its sales network.

Leapmotor was made a member of the elite '10K club' earlier this year after it sold 10,059 EVs in March. This marked a significant sales jump that provided energy for its IPO plans.

The company was able to surpass more well-known rivals, like Nio, which saw its sales jump 200%. However, Nio's deliveries fell below 10,000 per month. Leapmotor's first quarter total car sales soared 410%, to 21,579.

According to a company statement CALB, a Chinese battery manufacturer, is currently raising $1.7 billion through an IPO. This deal would surpass Leapmotor's and make it the largest new share sale in Hong Kong this fiscal year. Volumes of Hong Kong IPOs have dropped nearly 90% due to China's regulatory uncertainty, rising inflation, and Russia's war against Ukraine.