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Leapmotor initially projected to raise as much as $1.5 billion for the IPO but later scaled it down
Amidst the tight financial and economic landscape, Chinese Electric Vehicle (EV) maker, Zhejiang Leapmotor Technology is looking to raise the sum of $1.03 billion in its Initial Public Offering (IPO). Billed to float the IPO in Hong Kong, Zhejiang Leapmotor is looking to sell as much as 130.82 million in the deal with the projected plan price ranging from HK$48 to HK$62 according to the filing.
It is a very tough time to be considering public listing in any market around the world considering the global economic outlook. From the aftermath of the COVID-19 pandemic to the Russia and Ukraine war that is still of much concern and to the global inflationary surge. At the moment, investors are been extremely cautious about betting on any stock.
Despite this gloomy outlook, Zhejiang Leapmotor is optimistic about the IPO, and depending on the range of the price of the IPO, the company is targeting a valuation in the range of $6.99 billion to $9.03 billion. As far as Hong Kong is concerned this year, the proposed Zhejiang Leapmotor IPO will tag as one of the biggest thus far, and its success will be used to weigh the health of the island’s financial capabilities.
Leapmotor initially projected to raise as much as $1.5 billion for the IPO but later scaled it down based on earlier highlighted market concerns. The final pricing for the shares is due this Friday and trading of the EV maker’s stocks is expected to start by the end of the month, on September 29 to be precise.
It is not only Zhejiang Leapmotor that has had to explore a more conservative approach to its IPO. China Vanke’s property services group Onewo Space-Tech Service has also launched its IPO in which it hopes to pull the sum of $733 million. The initial amount that was projected by Onewo is $2 billion, but the revised target seems more achievable.
Investor’s Interest in Zhejiang Leapmotor to Be Fueled by Its Prospects
For any investor to participate in any IPO or investment as a whole, they must have something to hold onto. The prospects of Zhejiang Leapmotor as the 12th largest EV maker in terms of sales is one of the features driving its popularity amongst investors looking for a high-growth stock.
The company produces 4 unique vehicle brands that typically target lower and middle-income customers. The price of its vehicles ranges from 79,500 yuan-300,000 yuan ($11,466.40-$43,269.44) according to its prospectus.
The affordability of the company’s vehicles can convince investors that the firm can warm its way into customers’ hearts and help drive sales up in the near future. For the company to survive in China and amongst its global brand, it needs a competitive advantage, and it is defining its own by its low-priced vehicles.