Chinese lithium giant tests investor demand for IPO in Hong Kong

HONG KONG — One of China’s leading lithium producers has started trading what is expected to be Hong Kong’s largest initial public offering to date this year, facing recent market volatility to test global investors’ appetite for new energy stocks. .

Lithium Tianqi Corp.

002466 -1.01%

aims to raise more than $ 1 billion in a listing on the Hong Kong Stock Exchange, according to those familiar with the matter. The Chengdu-based company, which says it is one of the largest producers of lithium batteries in the world, has been listed on Shenzhen since 2010. Its mainland shares have doubled in value over the past 12 months, giving it a market capitalization of about $ 26 billion, according to FactSet.

The company filed a revised prospectus on June 19 after passing an listing in Hong Kong and earlier receiving approval from China Securities Regulator to sell shares in the Asian financial hub. It is expected to price its IPO on July 6 and start trading on July 13, people familiar with the deal said. The final size of the deal may change depending on investor demand.

Tianqi Lithium is trying to raise a large amount of capital at a time when global demand for IPOs is declining. Rising US inflation, soaring interest rates, Russia’s invasion of Ukraine and uncertainty about the global economic outlook have fueled a global sell-off that has pushed new stock volumes lower.

The Hong Kong market has been hit hard. For the period from year to date, companies have raised a total of $ 2.4 billion in new and minor stock imports in the city, down more than 90% in value from the same period last year, according to Dealogic .

Tianqi Lithium, which has been active for about 30 years, produces lithium compounds and derivatives in China and owns and mines lithium ores in Australia, according to its newsletter. The metal is used in rechargeable batteries and is in demand for the production of electric vehicles. It is also used to make glass, ceramics and other types of derivatives.

The company had previously applied for admission to Hong Kong in 2018 and was aiming to raise a similar amount at the time to help pay for a minority stake it bought that year at a Chilean-based lithium production and distribution company. known as SQM. The public offering ended up on the shelf, although it received the green light from the Securities Regulatory Commission.

Proceeds from the upcoming Hong Kong share sale will be used to repay Tianqi Lithium’s still $ 4 billion debt from Chile’s mining deal, as well as to finance the construction of a lithium carbonate plant in the Sichuan province of Anju. of China. .

Shenzhen-listed shares of Tianqi Lithium and one of its main competitors, Ganfeng Lithium Co.

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

Tianqi Lithium revenue more than doubled to $ 1.13 billion in 2021 and the company reported a profit of $ 626 million, up from a loss of $ 167 million earlier.

Write to Dave Sebastian at

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Chinese lithium giant tests investor demand for IPO in Hong Kong

Source link Chinese lithium giant tests investor demand for IPO in Hong Kong

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