China’s REPT Battero shares rise 5% in Hong Kong trading debut

By Scott Murdoch and Donny Kwok

SYDNEY (Reuters) -Shares of Chinese lithium ion battery maker REPT Battero Energy rose 5% in early trading after the company’s debut on the Hong Kong Stock Exchange on Monday.

The Tsingshan Group-backed firm raised HK$2.12 billion ($271.71 million) from selling 116.1 million shares in its initial public offering (IPO).

The final price of HK$18.30 per share was set at the low end of the range of HK$18.20 to HK$20.60 when the deal launched last week. REPT shares opened at HK$18.60 and rose as high as HK$19.22.

Hong Kong’s broader Hang Seng Index was down 0.9% early on Monday.

REPT was the latest in a string of Hong Kong IPOs to price at the lower end of the band because of weak investor demand.

Institutional demand was 1.27 times the number of shares on offer to investors in the IPO, according to REPT’s regulatory filings, while retail demand was 1.21 times.

Demand at those levels is considered poor compared to the peak of Hong Kong’s IPO boom in 2021 when some deals were thousands of times oversubscribed.

Higher-for-longer interest rates and ongoing global geopolitical tensions have pushed Hong Kong IPO volumes in 2023 to the lowest point in at least 20 years, according to LSEG data.

China dominates the global electric vehicle battery supply chain, with a growing number of the country’s major EV manufacturers also moving into battery production.

Tsingshan controls up to 60% of REPT, according to regulatory filings, as a major shareholder and co-founder of the battery firm.

The major Chinese nickel and stainless steel producer was at the centre of a London Metal Exchange (LME) crisis in March 2022 when nickel trading was suspended for eight days amid wild swings in the commodity’s price.

Tsingshan held large short positions that helped spur an explosive rise in nickel prices, much of it in over-the-counter (OTC) positions not visible to the LME.

(Reporting by Scott Murdoch in Sydney and Donny Kwok in Hong Kong; Editing by Jacqueline Wong and Jamie Freed)