Chinese electric vehicle (EV) manufacturer Zhejiang Leapmotor Technology has successfully listed on the Hong Kong exchange on September 29 and aimed to raise $800 million, but suffered a severe sell-off in its debut. It tumbled more than 40% during the trading session, making the worst first-day performance for a Hong Kong initial public offering (IPO) above $500 million on record.

Founded in 2015, EV focuses on China’s mid-to-high-end EV market with a price range of about $11,500 to $43,000, according to its website and prospectus filed with the Hong Kong Stock Exchange. This is expected to be the largest and fastest-growing market segment by 2023.

EV set its IPO at HK$48 ($6.12)per share with a total of 131 million shares. According to Reuters, closing deep in red on its debut on Thursday has dampened prospects of a recovery in new share sales in the city for the rest of the year.

In response to the loss, Leapmotor’s chairman said it’s not a good time because of the global turmoil and the downward spiral of the stock markets.

Ke Yan, the lead analyst at DZT Research, said, “Weak sentiment in the secondary market has not normalized yet.” He added, “The key issue for IPOs in the future in Hong Kong will be the tug of war between companies and investors in respect to valuation, and that could last for a long time.”
Hong Kong equities index also slumped as volatility surges. Hang Seng Index (.HSI) fell 0.61%, and the Hang Seng Tech Index declined 1.63%

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