Chinese EV battery maker CALB raises US$1.26 billion in Hong Kong’s third-largest IPO this year as local investors shun 79 per cent of allocation

China Aviation Lithium Battery (CALB), the country’s third-largest EV battery maker, priced the shares at the bottom of its marketed range

The Hong Kong tranche, which was undersubscribed 0.21 times, has been offered to international investors, pulling its share down to 1 per cent of the overall offer

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China Aviation Lithium Battery reported year-on-year sales growth of more than 100 per cent for three consecutive years from 2019 to 2021 amid a boom in battery-powered car sales in China. Photo: Facebook

Published: 12:21pm, 5 Oct 2022Updated: 1:58pm, 5 Oct 2022

China Aviation Lithium Battery (CALB), the country’s third-largest electric vehicle (EV) battery maker, has raised HK$9.9 billion (US$1.26 billion) from its initial public offering, after pricing the shares at the bottom of the marketed range.

The Jiangsu-based company offered the shares at between HK$38 and HK$51 apiece, and settled for floor price after gauging investor demand, according to a Hong Kong exchange filing on Wednesday. The proceeds will still rank the CALB IPO as the third-largest in the city this year after China Tourism Duty Free raised US$2.1 billion in August and Tianqi Lithium’s issue generated US$1.7 billion in July.

CALB only managed to sell 21 per cent of the shares allocated to Hong Kong investors, pushing the unwanted 10.4 million shares to global investors, the filing showed. Recent IPOs by Chinese EV maker Zhejiang Leapmotor Technology and property services group Onewo also suffered from weak take-up rates in the city, leading to steep losses on their first day of trading.

Trading in CALB will begin on Thursday.

The battery manufacturer reported year-on-year sales growth of more than 100 per cent for three consecutive years from 2019 to 2021 amid a boom in battery-powered car sales in China, the world’s largest automotive and EV market.

CALB, which received approval for its IPO on September 8, posted a net profit of 111.5 million yuan (US$15.6 million) in 2021, turning around from a loss of 18.3 million yuan the previous year.

The company was co-founded in 2015 by a unit controlled by Aviation Industry Corp of China, the state-owned conglomerate that makes fighter jets for the military and owns about 10 per cent of CALB.