The latest: Electric vehicle maker Zhejiang Leapmotor Technology Co. Ltd. (9863.HK) made its trading debut in Hong Kong on Thursday with an opening price of HK$41, down 14.6% from its IPO price of HK$48.

Looking up: The international portion of the listing, which accounted for 90% of the IPO’s 130 million shares sold, was over-subscribed by 233%.

Take Note: Response to the local portion of the offering was anemic, with only 16% of the shares on offer subscribed. In the end, the company raised about HK$6.3 billion ($808 million) as it priced the offer at HK$48, representing the lower end of the IPO price range.

Digging Deeper: Established by defense technology company Zhejiang Dahua Technology (002236.SZ) and its leading founders in 2015, Leapmotor has launched four models to date, priced from 80,000 yuan ($11,100) to 270,000 yuan after subsidies. It plans to launch seven new models by the end of 2025 covering all sizes of sedans, SUVs and MPVs. According to its prospectus, the company has never made a profit since its inception due to the high cost of sales. Its revenue of 3.13 billion yuan last year was up nearly fourfold year-on-year, but its loss also expanded 159% to 2.85 billion yuan. The company is expected to remain unprofitable this year.

Market Reaction: Leapmotor’s shares extended their early declines on Thursday morning, closing HK$30.30 at the midday break, down 36.9% fall from the IPO price.

Translation by Jony Ho

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