By
Godfrey Benjamin
April 20th, 2024
Leapmotor and Onewo saw their shares shrink after making their first appearances in the stock market.
Chinese EV maker Leapmotor and property service company Onewo plunged on their first day of trade after one of the largest initial public offerings (IPOs) in Hong Kong. Specifically, the offerings were the largest for 2022 in Hong Kong. After making their public debut, shares of Leapmotor and Onewo plunged as they became available to trade in the city. While it prepared for its IPO, Leapmotor announced its final offer price was HK$48.00 ($6.11) per offer share. Similarly, Onewo revealed that its offer price was HK$49.35 ($6.29) per offer share ahead of its market debut.
After the IPO, Onewo secured HK$5.6 billion ($713.5 million) and Leapmotor raised HK$6.06 billion ($771.7 million).
Leapmotor and Onewo Decline Following Market Debut
However, Leapmotor and Onewo saw their shares shrink after making their first appearances in the stock market. While the EV maker dropped as much as 41.6% from its offer price, Onewo also declined 7.9% from its offer price of 49.35 Hong Kong dollars. The company’s shares fell after reportedly falling in grey market trading a day before the IPO. A Reuters report stated that Leapmotor and Onewo were set to “open in the red” due to the grey market trading the previous day. Also, the automaker’s shares went down 15% on a grey market offered by Phillips Securities Group in Hong Kong. Backed by developer Vanke, Onewo’s shares dropped about 8% in the same market. Officially, shares of both companies started trading on the Hong Kong Stock Exchange on Thursday.
Additionally, investors did not embrace Leapmotor and Onewo as their shares were undersubscribed. Hong Kong retail investors did not take the full amount of shares the companies offered in the IPO, per their respective filings. The local market brought about 82% of the property service company’s shares and 16% of Leapmotor’s. As such, unsold from retailers were allocated to institutional investors.
As the largest IPOs in 2022 for Hong Kong, the losses would naturally impact the city’s market. Hong Kong’s Hang Seng Index shed 3.4% on Wednesday, the Property Services Index declined 5.86%, and the Tech Index plummeted 3.85%.
According to data from Hong Kong Exchange, there were 48 new listings in Hong Kong between January and August 2022. These listings jointly generated HK$56 billion. Meanwhile, there were 69 new listings during the same period in 2021, which resulted in HK$271.4 billion. These figures show a steep drop in IPOs on the Hong Kong Exchange.