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Chinese electric vehicle maker Leapmotor set to raise $800 million in Hong Kong IPO

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HONG KONG, Sept 25 (Reuters) – Chinese electric vehicle (EV) maker Zhejiang Leapmotor Technology is set to raise $800 million by pricing its shares at HK$48 ($6.12) each when it went public in Hong Kong, two sources said. having direct knowledge of the subject.

Although that’s less than the $1.03 billion the electric vehicle maker said it was aiming to raise in its regulatory filings last week, the IPO would still be the biggest in town this year. . It had planned to raise $1.5 billion but scaled back after a lukewarm response from investors.

The sources spoke on condition of anonymity as the pricing information was not public. Leapmotor did not immediately respond to an out-of-hours request for comment from Reuters.

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The price revealed on Sunday is at the lower end of the range of HK$48 to HK$62 per share that Leapmotor has set for the 130.82 million share deal.

Potential investors have reduced their orders due to volatility in global financial markets, a source said.

In the US, the S&P500 (.SP500) fell 4.7% last week as the Federal Reserve raised interest rates and markets remained concerned about high inflation. Hong Kong’s Hang Seng Index (.HSI) fell 4.4%, its worst in 10 weeks.

Hangzhou-based Leapmotor produces four electric vehicle models that mainly target China’s mid-range and low-end mass market in the price range of 79,500 to 300,000 yuan ($11,500 to $43,000), according to its website and its prospectus filed with the Hong Kong Stock Exchange.

It plans to use funds from the IPO for research and development and to strengthen its production capacity and sales network, according to regulatory documents.

Chinese battery maker CALB raises up to $1.7 billion in an IPO, according to a company statement, in a deal that would eclipse Leapmotor and make it the biggest new sale ever. shares in Hong Kong in 2022.

Hong Kong IPO volumes have fallen nearly 90% as global markets remain rocked by regulatory uncertainty in China, rising interest rates, high inflation and Russia’s war in Ukraine.

Despite deals with Leapmotor and CALB, as well as China Vanke’s real estate services unit Onewo Inc, which raised $733m, dealmakers are cautious there will be a strong rebound in new Hong stock sales Kong and overseas before 2023.

“It looks like these IPOs are kind of one-time deals and think the Hong Kong market is not fully open yet,” said Shifara Samsudeen, an analyst at LightStream Research who posts on Smartkarma.

“Most of the deals have been reduced,” she said. “There were long gaps between audience approval, pre-market and listing, all of which suggest the market is not yet back to normal.”

($1 = HK$7.8493)

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Reporting by Scott Murdoch; Editing by Himani Sarkar and William Mallard

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