China battery maker CALB closes flat in Hong Kong debut

People walk past a screen displaying the Hang Seng stock index outside Hong Kong Exchanges, in Hong Kong, China July 19, 2022. REUTERS/Lam Yik

HONG KONG, Oct 6 (Reuters) - Shares of Chinese lithium battery maker CALB Co Ltd (3931.HK) stock ended their first day of trading flat on the Hong Kong Stock Exchange on Thursday, extending the run of lacklustre initial public offering (IPO) debut performances in the city this year.

The company raised $1.28 billion in its initial public offering (IPO), the largest in Hong Kong in 2022.

The stock opened flat and then traded in the red for most of the day before ending at HK$38, in line with the price set at the end of the IPO.

CALB sold 265.8 million shares and set the price of the stock at the bottom of the HK$38 to HK$51 per share range outlined when the deal was launched.

Chinese electric vehicle maker Zhejiang Leapmotor Technology Co Ltd (9863.HK) sunk 33.5% and Onewo Inc (2602.HK), a unit of property developer China Vanke Co Ltd , shed nearly 7% when they debuted last week.

More than 80% of the IPOs in Hong Kong this year, which have raised $9.18 billion, are trading under water since their debut, according to Dealogic data.

Nearly half of the 48 IPOs this year closed down on their first trading day, the data showed.

Hong Kong's Hang Seng Index (.HSI) closed down 0.4% on Thursday.

The CALB deal received a lukewarm response from investors with retail shareholders not taking up to their full entitlement of shares on offer, CALB's listing documents showed.

The institutional portion of the IPO was 2.11 times covered, which was well below the traditional subscription rates of Hong Kong IPOs.

Demand for CALB shares was considered weak despite batteries being a hot sector globally sector, as investors remain cautious about buying into new share sales when equities markets remain so weak.

IPOs in Hong Kong are down nearly 75% so far in 2022 compared with the same time last year, data from Refinitiv showed, as geopolitics, the Ukraine war and rising interest rates dent investor confidence.

Reporting by Scott Murdoch and Donny Kwok; Editing by Muralikumar Anantharaman,Christopher Cushing and Kim Coghill

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Scott Murdoch has been a journalist for more than two decades working for Thomson Reuters and News Corp in Australia. He has specialised in financial journalism for most of his career and covers equity and debt capital markets across Asia based in Hong Kong.