Shares of Tianqi Lithium slumped about 10% in their Hong Kong market debut Wednesday, after the Chinese company raised about $1.7 billion in the city’s biggest listing so far this year.
The stock traded at around 74.50 Hong Kong dollars ($9.49), lower than the offer price of HK$82 ($10.45) a share. It slipped to as low as HK$72.65 before paring back some losses.
Tianqi Lithium, which was already listed in Shenzhen, is one of the world’s top suppliers of rechargeable battery components for electric vehicles.
“We are listed in China already and it is already a very good, big platform for financing. But it is limited in China,” Frank Ha, the executive director and CEO at Tianqi Lithium, told CNBC’s “Streets Signs Asia” on Wednesday.
“We going into the Hong Kong market that is our strategy of crossing the globe. We need to make an international platform for financing. That’s why that we considered and then evaluate the situation. I think the current time is the best time that we can come here to list in the market,” he added.
The company sold 164.12 million shares in its secondary listing in Hong Kong, according to its regulatory filings. The share sale breaks a monthslong drought for large offerings in Hong Kong, where funds raised between January and June fell more 90% from the previous year.
Tianqi’s Hong Kong offering has drawn seven cornerstone investors that are set to snap up about 38% of the listing, the prospectus showed.
Ha said the electric vehicle market is showing strength globally and is not just limited to China.
“We can see that in Europe and in the other places in the world there is still very strong demand of EV,” he said. Ha added electric vehicle demand in the next five to six years is likely to stay elevated as more countries pledge to become carbon neutral by 2050.
The current market sentiment is quite challenging but given fundamentals of Tianqi Lithium, the company’s earnings potential is better than others given “very high lithium prices,” said Dennis Ip, head of power and utilities, at Daiwa Capital markets.
“Tianqi Lithium share price is very driven by the lithium compound prices as well,” he told CNBC on Wednesday.
“We still think that lithium price will remain strong in the second half this year, but next year will be challenging,” as demand can be affected by the macroeconomic environment, he added.
This story originally Appeared on Cnbc.com