Shares of Tianqi Lithium slump around 10% in HK debut

Shares of Tianqi Lithium slumped about 10% in their Hong Kong sector debut Wednesday, immediately after the Chinese business elevated about $1.7 billion in the city’s major listing so far this yr.

The stock traded at around 74.50 Hong Kong pounds ($9.49), reduced than the supply rate of HK$82 ($10.45) a share. It slipped to as very low as HK$72.65 in advance of paring back again some losses.

Tianqi Lithium, which was previously outlined in Shenzhen, is 1 of the world’s prime suppliers of rechargeable battery elements for electric automobiles.

“We are shown in China previously and it is already a incredibly good, significant system for funding. But it is limited in China,” Frank Ha, the govt director and CEO at Tianqi Lithium, advised CNBC’s “Streets Indicators Asia” on Wednesday.

“We heading into the Hong Kong marketplace that is our method of crossing the world. We have to have to make an intercontinental platform for funding. Which is why that we regarded and then evaluate the predicament. I consider the latest time is the ideal time that we can arrive listed here to listing in the sector,” he extra.

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The corporation offered 164.12 million shares in its secondary listing in Hong Kong, according to its regulatory filings. The share sale breaks a monthslong drought for significant choices in Hong Kong, in which resources elevated in between January and June fell extra 90% from the preceding calendar year. 

Tianqi’s Hong Kong giving has drawn 7 cornerstone traders that are set to snap up about 38% of the listing, the prospectus confirmed.

Tianqi Lithium’s outlook

Ha said the electric auto current market is displaying energy globally and is not just minimal to China.

“We can see that in Europe and in the other locations in the entire world there is even now quite robust desire of EV,” he reported. Ha extra electric powered vehicle demand in the next 5 to six many years is most likely to remain elevated as far more international locations pledge to develop into carbon neutral by 2050.

The recent sector sentiment is pretty difficult but presented fundamentals of Tianqi Lithium, the company’s earnings possible is better than some others specified “quite large lithium charges,” stated Dennis Ip, head of energy and utilities, at Daiwa Money markets.

“Tianqi Lithium share selling price is quite driven by the lithium compound selling prices as properly,” he instructed CNBC on Wednesday.

“We continue to believe that lithium selling price will remain sturdy in the second half this calendar year, but future 12 months will be tough,” as demand can be affected by the macroeconomic ecosystem, he included.

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