Shares of Chinese lithium battery maker CALB Co Ltd fell below the group’s issue price of HK$38 in its trading debut on the Hong Kong Stock Exchange on Thursday.
The stock slid to trade down 1.4%, which was similar to poor recent first-day performances by newly listed companies in Hong Kong.
Chinese electric vehicle maker Zhejiang Leapmotor Technology Co Ltd sunk 33.5% and Onewo Inc, a unit of property developer China Vanke Co Ltd, shed nearly 7% when they debuted last week.
Hong Kong’s Hang Seng Index rose 0.07% after the opening but weakened to be down 0.5% midway through the morning session.
CALB sold 265.8 million shares and set the price of the stock at the bottom of the HK$38 to HK$51 per share range outlined when the deal was launched.
The deal received a lukewarm response from investors retail shareholders not taking up to their full entitlement of shares on offer, CALB’s listing documents showed.
Nonetheless, the company raised $1.28 billion in its initial public offering (IPO), the largest in Hong Kong in 2022.
The institutional portion of the IPO was 2.11 times covered which was well below the traditional subscription rates of Hong Kong IPOs.
Demand for CALB shares was considered weak despite batteries being a globally hot sector, as investors remain cautious buying into new share sales when equities markets remain so weak.
IPOs in Hong Kong are down nearly 75% so far in 2022 compared with the same time last year, showed data from Refinitiv, as geopolitics, the Ukraine war and rising interest rates dent investor confidence.
- Reuters with additional editing by Jim Pollard