HONG KONG, Sept 9 (Reuters) - Chinese electric vehicle maker
Zhejiang Leapmotor Technology has shelved a plan to raise $1.5
billion through an initial public offering (IPO) in Hong Kong
because of lukewarm investor interest, said two sources with
direct knowledge of the matter.
Bankers and advisers had hoped a deal of the size planned by
Leapmotor, which would have been Hong Kong's largest IPO so far
in 2022, would revive the city's flagging new issue market.
Instead, the deal has been put on hold and Leapmotor is
considering cutting the size of the transaction, one of the
The decision to pause the Hong Kong IPO was made after the
company met with investors over the past week to gauge sentiment
towards the company and its listing plans, the sources said.
A smaller IPO size would be more attractive to cautious
investors and the deal could be brought back if market
conditions improve, the first source said.
Leapmotor did not respond to an emailed request for comment.
The sources could not be named as the information was not
Leapmotor produces four electric vehicle models that mainly
target China's middle- and lower-end mass market in a 79,500
yuan-300,000 yuan ($11,466.40-$43,269.44) price range, according
to its website and prospectus filed with the Hong Kong Stock
Bigger EV makers such as Nio Inc see themselves
more as China's challenger to Tesla Inc, mainly
producing more expensive and high-end cars.
Leapmotor was ranked 12th in terms of sales in the first
seven months among all EV makers in China, with a market share
of 2.3%, according to data from the China Passenger Car
It was founded in 2015 in Hangzhou, capital of China's
Southeastern Zhejiang province, by the country's second-largest
surveillance equipment maker Zhejiang Dahua Technology
and its founders.
The firm also counts investment major Sequoia Capital China
and state-owned Shanghai Electric Group Corp among its main
Leapmotor had planned to use the proceeds of the IPO for
research and development as well as to boost its production
capacity and sales network.
It was not immediately clear what impact the IPO's shelving
will have on its operations and growth plans.
Volatile financial market conditions caused by Chinese
economic growth concerns, the Russia-Ukraine war, high inflation
and tightening monetary conditions in major economies have hit
investor sentiment in 2022.
Hong Kong IPO volumes have crashed nearly 90% year to date
to the lowest level in nine years.
There has been just $2.36 billion raised so far this year,
not including secondary listings of Tianqi Lithium,
China Tourism Group Duty Free Corp and others,
compared with $22.2 billion in the same period of 2021,
according to Refinitiv data.
($1 = 6.9333 Chinese yuan renminbi)
(Reporting by Scott Murdoch and Julie Zhu in Hong Kong;
Additional reporting by Zoey Zhang in Shanghai; Editing by