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China’s lithium giant is testing investor demand for the Hong Kong IPO

HONG KONG — One of China’s leading lithium producers began marketing Hong Kong’s largest initial public offering this year, facing the volatility of the final market to test the appetite of global investors for the shares of new energy companies.

Tianqi lithium Corp.

002466 – 1.01%

It aims to raise more than $ 1 billion in stock quotes on the Hong Kong Stock Exchange, according to people familiar with the matter. Chengdu, a China-based company that claims to be one of the world’s largest producers of battery-powered lithium compounds, has been on the Shenzhen list since 2010. Its mainland stock has doubled in value in the last 12 months, giving it a market. A capitalization of about $ 26 billion, according to FactSet.

The company filed a revised pamphlet on June 19 after passing the Hong Kong listing hearing and the Chinese securities regulator had previously received permission to sell shares in the Asian financial center. The price is expected to set on July 6 and start trading on July 13, according to people familiar with the deal. The size of the final agreement may vary depending on the demand of the investors.

Tianqi Lithium is trying to make a big buck at a time when the global demand for IPO has declined. Rising US inflation, a sharp rise in interest rates, Russia’s invasion of Ukraine and uncertainties about global economic outlook have helped boost global stock sales, which has led to a reduction in new share issuance volumes.

The Hong Kong market has been particularly tough; year-on-year, companies have raised a total of $ 2.4 billion in the city’s new and secondary stock list, more than 90% less than the same period last year, according to Dealogic data.

Tianqi Lithium, which has been in business for about 30 years, manufactures lithium compounds and derivatives in China and has lithium minerals and exploits them in Australia, according to its brochure. The metal is used in rechargeable batteries and has been in demand for the production of electric vehicles. It is also used to make glass, ceramics and other derivative products.

The company applied for listing in Hong Kong in 2018 and aimed to raise a similar amount at the time to pay for the minority stake it bought in a Chilean lithium production and distribution company known as SQM that year. The IPO was suspended, even though the Chinese Securities Regulatory Commission received the green light.

The proceeds from the sale of the shares in Hong Kong would be used to pay off the debt still owed by Tianqi Lithium from the $ 4 billion mining agreement in Chile, as well as to build a lithium carbonate plant in the Anju district of Sichuan province, China. .

Tianqi Lithium shares listed in Shenzhen and one of its main rivals, Ganfeng Lithium Co.

They have significantly outperformed the wider Chinese stock market over the past two years, thanks in part to the demand for compounds they produce.

Tianqi Lithium’s revenue more than doubled in 2021 to the equivalent of $ 1.13 trillion and the company had a profit of $ 626 billion compared to a loss of $ 167 million a year earlier.

Write Dave Sebastian at dave.sebastian@wsj.com

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China’s lithium giant is testing investor demand for the Hong Kong IPO

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