Chinese electric vehicle (EV) manufacturer Zhejiang Leapmotor Technology Ltd (零跑汽車) is hoping to raise more than US$1 billion with an initial public offering in what would be the largest debut so far this year in Hong Kong.
The Hangzhou-headquartered company is offering about 131 million shares priced at HK$48 to HK$62, according to a prospectus filed with the Stock Exchange of Hong Kong yesterday.
The listing will be a test of investor appetite in China’s EV sector. The industry has so far avoided the kind of sudden scrutiny from regulators that has bedeviled other technology sectors and hobbled profits.
China’s EV market is particularly competitive, with manufacturers jostling to take advantage of an industry boosted by generous purchase subsidies from local governments.
The Chinese government introduced a string of measures, including a tax break extension, in July to stimulate sales of electric vehicles against the backdrop of an economic slowdown.
The measures are supposed to support the economy at a time when sporadic COVID-19 lockdowns around the nation have dampened consumer enthusiasm and business confidence.
Founded in 2015, Leapmotor focuses on the mid to high-end EV market, with a price range of 150,000 yuan to 300,000 yuan (US$21,400 to US$42,800).
Cofounder Fu Liquan (傅利泉) also leads surveillance firm Dahua Technology Co (大華技術), one of the world’s largest manufacturers of security cameras.
Surveillance industry research group IPVM in 2020 alleged that Dahua developed “discriminatory software” used to track Uighurs in China’s Xinjiang region.
China’s EV market is huge, covering everything from luxury vehicles to more affordable models. Many EV manufacturers are looking to build an overseas presence and raise capital to fund that expansion.
Hong Kong is a popular listing destination given its proximity to mainland China at a time when Washington and Beijing have clashed over the audit transparency of Chinese companies, some of which have delisted in the US.
Chinese EV makers Xpeng Inc (小鵬汽車) and Nio Inc (蔚來汽車) have both forged secondary Hong Kong listings.
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