Leapmotor, Onewo IPOs undersubscribed in Hong Kong as stock investors get cold feet amid market sell-off

Hong Kong investors failed to fully subscribe for their local allocations in the two stock offerings as the Hang Seng Index slides to an 11-year low

Some 35 of the 47 IPOs in Hong Kong this year have handed investors losses, with Gogox the worst of the lot with a 76 per cent slump

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The Connect Hall at HKEX in Central, Hong Kong. Photo: Jonathan Wong

Published: 1:00pm, 28 Sep 2022Updated: 7:01pm, 28 Sep 2022

A sell-off in global stock markets is giving pause to investors in Hong Kong as Zhejiang Leapmotor Technology and Onewo Inc struggled to raise as much as HK$14.3 billion (US$1.8 billion) after an underwhelming response to their stock offerings.

Investors signed up for 2.146 million shares, just 16.4 per cent of Leapmotor’s local allocation, pushing the unwanted 10.9 million shares to overseas subscribers, according to an exchange filing on Wednesday. That represents one of the worst take-up rates in the city’s initial public offerings (IPOs) in recent years.

While the Chinese electric-vehicle maker succeeded in selling all of the 130.8 million shares on offer to globally, the IPO was priced at the lowest end of the marketed range of HK$48 to HK$62 per share to generate HK$6.06 billion of net proceeds.

Onewo, the property management services company controlled by developer China Vanke, also failed to impress local investors who bought 9.5 million shares or 82 per cent of the allocation, according to a separate exchange filing. Onewo priced its IPO at HK$49.35 per share, the lower half of the HK$47.10 to HK$52.70 marketed range, allowing Vanke to collect HK$5.6 billion of net proceeds.

Engineers work on the assembly line of T03 electric small crossover at a factory of Zhejiang Leapmotor on April 26, 2022. Photo: Getty Images

Leapmotor had targeted HK$8.11 billion at the top-end of its IPO price range, while Vanke would have received HK$6.11 billion. Both stocks will start trading in Hong Kong on Thursday.