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Shares of Tianqi Lithium fell as a lot as 10% of their Hong Kong market debut Wednesday earlier than closing flat.
The inventory fell as a lot as 11%, hitting a low of 72.65 Hong Kong {dollars} ($9.25). It later recovered to shut at its supply worth of HK$82 ($10.45) a share.
The Chinese language firm raised about $1.7 billion within the metropolis’s greatest itemizing to date this 12 months.
Tianqi Lithium, which was already listed in Shenzhen, is among the world’s high suppliers of rechargeable battery elements for electrical autos.
“We’re listed in China already and it’s already an excellent, massive platform for financing. However it’s restricted in China,” Frank Ha, the chief director and CEO at Tianqi Lithium, informed CNBC’s “Streets Indicators 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 is why that we thought of after which consider the scenario. I believe the present time is the perfect time that we will come right here to listing out there,” he added.
The corporate offered 164.12 million shares in its secondary itemizing in Hong Kong, based on 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 traders which can be set to snap up about 38% of the itemizing, the prospectus confirmed.
Tianqi Lithium’s outlook
Ha mentioned the electrical car market is exhibiting energy globally and isn’t just restricted to China.
“We will 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 car demand within the subsequent 5 to 6 years is prone to keep elevated as extra international locations pledge to turn out to be carbon impartial by 2050.
The present market sentiment is sort of difficult however given fundamentals of Tianqi Lithium, the corporate’s earnings potential is healthier than others given “very excessive lithium costs,” mentioned Dennis Ip, head of energy and utilities, at Daiwa Capital markets.
“Tianqi Lithium share worth may be very pushed by the lithium compound costs as effectively,” he informed CNBC on Wednesday.
“We nonetheless assume that lithium worth will stay robust within the second half this 12 months, however subsequent 12 months might be difficult,” as demand may be affected by the macroeconomic surroundings, he added.
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