Shares of Tianqi Lithium slumped about 10% of their Hong Kong market debut Wednesday, after the Chinese firm raised about $1.7 billion within the metropolis’s largest itemizing to this point this 12 months.
The inventory traded at round 74.50 Hong Kong {dollars} ($9.49), decrease than the supply value 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 among the world’s high suppliers of rechargeable battery parts for electrical automobiles.
“We are listed in China already and it’s already an excellent, huge platform for financing. But it’s restricted in China,” Frank Ha, the manager director and CEO at Tianqi Lithium, instructed CNBC’s “Streets Signs 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’s why that we thought of after which consider the scenario. I feel the present time is one of the best time that we will come right here to record available in the market,” he added.
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The firm bought 164.12 million shares in its secondary itemizing in Hong Kong, in accordance with its regulatory filings. The share sale breaks a monthslong drought for giant choices in Hong Kong, the place funds raised between January and June fell extra 90% from the earlier 12 months.
Tianqi’s Hong Kong providing has drawn seven cornerstone buyers which might be set to snap up about 38% of the itemizing, the prospectus confirmed.
Tianqi Lithium’s outlook
Ha mentioned the electrical automobile market is exhibiting power globally and isn’t just restricted to China.
“We can see that in Europe and within the different locations on the planet there’s nonetheless very robust demand of EV,” he mentioned. Ha added electrical automobile demand within the subsequent 5 to 6 years is more likely to keep elevated as extra nations pledge to change into carbon impartial by 2050.
The present market sentiment is kind of difficult however given fundamentals of Tianqi Lithium, the corporate’s earnings potential is best than others given “very excessive lithium costs,” mentioned Dennis Ip, head of energy and utilities, at Daiwa Capital markets.
“Tianqi Lithium share value may be very pushed by the lithium compound costs as effectively,” he instructed CNBC on Wednesday.
“We nonetheless assume that lithium value will stay robust within the second half this 12 months, however subsequent 12 months shall be difficult,” as demand will be affected by the macroeconomic atmosphere, he added.
