Tianqi Lithium Corp (天齊鋰業) fell as much as 11 percent in Hong Kong, following the largest share sale in the territory this year.
Its shares dropped to as low as HK$72.65 in early trading yesterday, before trimming losses.
The supplier of the key material used in batteries, already listed in China’s Shenzhen, sold the stock at HK$82 apiece in a secondary listing in Hong Kong. That was the top of a marketed range in an offering that raised about HK$13.5 billion (US$1.7 billion).
Photo: Bloomberg
The slump suggests investors remain wary of putting money into newly listed stocks in Hong Kong. Three other companies that debuted in the territory yesterday also dropped. The negative start casts a shadow over a pipeline of large offerings in the territory, including that of China Tourism Group Duty Free Corp (中國旅遊集團中免), the world’s largest travel retailer, which is planning a share sale of as much as US$3 billion.
However, Tianqi’s Hong Kong listing caps a major turnaround for the firm after a debt crisis just two years ago forced it to sell stakes in prize assets, and raised questions for management.
The company’s revival was aided by an eye-popping gain of more than 1,000 percent for lithium prices since the middle of 2020.
Tianqi mines lithium in Australia, and produces compounds and derivatives in China. The Chinese producer first brought up a secondary listing in 2018, but shelved the plan amid falling lithium prices and liquidity problems. In 2020, the company sold a stake in Australia’s Greenbushes, one of the world’s most coveted lithium mines, to Perth-based IGO Ltd for US$1.4 billion to help repay debt.
A fresh global push for electrified transport is fueling a demand boom for lithium — a key material used in electric vehicle batteries.
BloombergNEF data showed that lithium prices could stay elevated amid a tight market this year.
Tianqi is planning to more than double its lithium refining capacity in the next three years to about 99,790 tonnes, from about 45,000 tonnes, chief executive officer Frank Ha (夏浚誠) said in an interview with Bloomberg Television yesterday.
“The continued ramp-up of revenues and prices is something that we can foresee,” Ha said.
Most companies that debuted in Hong Kong this year fell on their first day of trade, data compiled by Bloomberg showed.
Retailer Miniso Group Holding Ltd (名創優品), wealth management company Noah Holdings Ltd (諾亞控股) and piped natural gas distributor Huzhou Gas Co (湖州燃氣) slumped as much as 4.9 percent, 7.3 percent and 9.5 percent respectively on their first day of trading yesterday.
Big offerings have dwindled this year amid rising inflation, hawkish central banks and a jump in volatility that has led the Hang Seng Index to retreat more than 10 percent.
Strong appetite for listings in the territory has yet to return, DZT Research head of research Ke Yan said.
“Everyone is still working hard to find [a] deal to profit from,” he said.
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