(Yicai Global) Sept. 29 -- Shares in Zhejiang Leapmotor Technology plunged as much as 41.6 percent below the issue price today on the Chinese electric car startup’s first day of trading on the Hong Kong stock exchange.

Leapmotor’s share price [HKG:9863] headed downwards the moment markets opened, sinking to HKD28 (USD3.50) apiece at one point. Although the stock recovered slightly, it ended the day down 29.1 percent at HKD34 (USD4.33).

The Hangzhou-based firm that raised HKD6.2 billion (USD800 million) in the initial public offering was a disappointing start. The IPO was undersubscribed, with only 16 percent of the 130.8 million shares on offer subscribed for and the issue price of HKD48 was at the bottom of the previously indicated range.

Shares in other Chinese NEV makers Nio, Lio Auto and Xpeng Motors also slumped on their debut in Hong Kong. That of Guangzhou-based Xpeng sank more than 30 percent. However, both Li Auto and Xpeng were oversubscribed at six-and-a-half times and over 15 times respectively. Nio did not have an IPO in Hong Kong, but went public by way of introduction.

Leapmotor plans to use 40 percent of the proceeds to develop new vehicle models as well as technologies related to autonomous driving, batteries and electric control systems, it said in the IPO prospectus. Twenty-five percent will be spend on expanding new businesses as well as raising brand awareness and the rest will supplement working capital.

Leapmotor delivered 12,525 vehicles last month to rank second among Chinese electric car startups. In the first eight months it shipped 76,563 units. In the first quarter, the company’s losses widened more than two-and-a-half times from a year earlier to CNY1 billion (USD142.6 million) while revenue surged over seven-fold to USD2 billion. It has lost a combined CNY4.8 billion (USD666 million) since 2019 and expects to continue to lose money this year, it said.

Leapmotor, which was set up in 2015, produces mid-to-high range NEVs priced between CNY150,000 (USD21,400) and CNY300,000. It has three models on the market and one that has started presales. The firm aims to unveil another eight autos, including three sedans, four sports utility vehicles and one multi-purpose car, in the next three years, according to the prospectus.

Editor: Kim Taylor