CATL Rival CALB Flat in Hong Kong Debut amid Weak Demand

BEIJING, October 6 (TMTPOST)— China Aviation Lithium Battery (CALB), a battery maker backed many big players across electric vehicle (EV) industry, failed to shrug off dismal of the broader market in its Hong Kong debut.

Source: CALB

Shares of CALB opened at HK$38.00 under the stock code “3931” on Thursday, in line with the offer price, and also settled flat after slipping into red and dropped as much as1.6% at midday. The performance seems weaker than the expectation that could have revived Hong Kong initial public offering (IPO) market.The deal was considerably undersubscribed as the received bids only account for 0.21% of the total available shares, highlighting weak investor demand at home and abroad.

With the list price at the bottom of range, CALB raised HK$10.1 billion (US$1.26 billion) through around 266 million shares offering, making the company the third to launch a Hong Kong listing crossed US$1 billion since the beginning of 2022. China Tourism Group Duty Free Corp. (CDFG), the world’s largest duty-free retailer, sold 102.8 million with more than HK$16.2 billion (US$2 billion) listing on August 25, creating the largest ever IPO of the year in Hong Kong. The next to CDFG is Tianqi Lithium, whose listing in July raised HK$13.5 billion (US$1.7 billion).

CALB’s floatation came amid a lackluster market through the year. Prior to CALB, both of two new faces landed on the Hong Kong market last week underperformed. EV maker Leapmotor closed 34% lower than its offer price on the first trading day, and Onewo Inc., a unit of a major Chinese real estate developer Vanke, settled 6.8% lower in its debut.

As the first EV battery manufacture listed in Hong Kong, CALB attracted a number of big names in the sector. There are 15 cornerstone investors who subscribed more than 149 million shares worth of US$736 million in total, accounting for 56.17% of the overall offering. Among these investors, Tianqi Lithium Corp., one of the world’s leading lithium chemical producers for EV batteries, agreed to buy US$100 million shares. The non-ferrous metal miner Chengtun Mining Group and Tesla’s Chinese rival Xpeng Inc. also joined in with purchases of US$80 million and USUS$20 million respectively.

From January to August of the year, CALB ranked the third in terms of battery installation for EVs in China with the market share of 7.02%, second to Contemporary Amperex Technology Co. Ltd. (CATL) and BYD, which took 47.45% and 22.19% shares respectively, according to the China Automotive Power Battery Industry Innovation Alliance. CALB CEO Liu Jingyu said his company wants to become top five in global EV battery market in the coming year and rise to the third in three to five years.