China’s Tsingshan Holding Group, the world’s biggest nickel producer, is set to raise up to HK$2.39bn ($306mn) in an initial public offering of a battery-making subsidiary on Monday, testing investor appetite at the end of another lacklustre year for listings in Hong Kong. The IPO of Chinese lithium-ion battery manufacturer REPT Battero Energy is set to be the fourth largest in Hong Kong this year but comes after tepid market sentiment for new share listings.
Its stock exchange has become only the seventh-largest destination for IPOs in 2023, after topping the global rankings as recently as 2019. The listing gives rare public exposure to Tsingshan and its low-key founder Xiang Guangda, who was unexpectedly thrust into the global spotlight when his huge bet on falling nickel prices backfired in March last year. Tsingshan suffered a trading loss of about $1bn and the London Metal Exchange suspended nickel trading for eight days. REPT is the latest Chinese battery maker to tap global investors in offshore markets, as the country’s electric vehicle industry gears up for global expansion. The listing exposes Xiang’s strategy of extending his raw materials business into the manufacturing of EV batteries.
Tsingshan was a long-term, predictable supplier of raw materials that could support future global expansion, said REPT director Wang Haijun at an online briefing last week. “REPT’s goal is to become a highly international enterprise, and it is currently deploying overseas infrastructure in countries like Indonesia, Europe, Chile and elsewhere,” he added. The company is debuting in a market in which no listing has surpassed $1bn this year, according to Dealogic, with investor enthusiasm damped by China’s sluggish economy, capital outflow pressures due to high US interest rates and rising geopolitical risk.