Shares of Tianqi Lithium slumped about 10% of their Hong Kong market debut Wednesday, after the Chinese language firm raised about $1.7 billion within the metropolis’s greatest itemizing to date this yr.
The stock traded at around 74.50 Hong Kong dollars ($9.49), decrease than the supply worth of HK$82 ($10.45) a share. It slipped to as little as HK$72.65 earlier than paring again some losses.
Tianqi Lithium, which was already listed in Shenzhen, is likely one of the world’s high suppliers of rechargeable battery parts for electrical autos.
“We’re listed in China already and it’s already an excellent, massive platform for financing. However it’s restricted in China,” Frank Ha, the manager director and CEO at Tianqi Lithium, advised CNBC’s “Streets Indicators Asia” on Wednesday.
“We going into the Hong Kong market that’s our technique of crossing the globe. We have to make a world platform for financing. That is why that we thought-about after which consider the scenario. I feel the present time is one of the best time that we are able to come right here to listing available in the market,” he added.
The corporate offered 164.12 million shares in its secondary itemizing in Hong Kong, based on its regulatory filings. The share sale breaks a monthslong drought for giant choices in Hong Kong, where funds raised between January and June fell extra 90% from the earlier yr.
Tianqi’s Hong Kong providing has drawn seven cornerstone traders which can be set to snap up about 38% of the itemizing, the prospectus confirmed.
Tianqi Lithium’s outlook
Ha mentioned the electrical car market is exhibiting power globally and is not only restricted to China.
“We will see that in Europe and within the different locations on the planet there’s nonetheless very sturdy demand of EV,” he mentioned. Ha added electrical car demand within the subsequent 5 to 6 years is more likely to keep elevated as extra nations pledge to grow to be carbon impartial by 2050.
The present market sentiment is sort of difficult however given fundamentals of Tianqi Lithium, the corporate’s earnings potential is healthier than others given “very excessive lithium costs,” mentioned Dennis Ip, head of energy and utilities, at Daiwa Capital markets.
“Tianqi Lithium share worth may be very pushed by the lithium compound costs as effectively,” he advised CNBC on Wednesday.
“We nonetheless suppose that lithium worth will stay sturdy within the second half this yr, however subsequent yr will probably be difficult,” as demand may be affected by the macroeconomic setting, he added.
