Leapmotor Technology Shares Drop After Investment News

1 Mins read

Zhejiang Leapmotor Technology’s shares experienced a decline at the mid-day break, despite an initial rise, following news of a 1.5 billion euro ($1.58 billion) investment by Stellantis in the Chinese electric-vehicle maker.

Early Gains Reversed

Leapmotor shares ended the morning session down 9.4% at 33.40 Hong Kong dollars, reversing the early gains that reached as high as 11.5%. According to Ke Qu, an analyst at CCB International Securities, the dip in stock price can be attributed to early investors seeking an opportunity to exit the company.

Cash Flow Challenges and Partnership Potential

Qu explained that Leapmotor faces cash flow challenges compared to other listed startups in China. Therefore, partnering with a company like Stellantis can help leverage its exposure and competitiveness in European or U.S. markets. Qu stated, “Greater access to the EU means better profitability than elsewhere in the world.”

Stellantis’ Investment Details

Stellantis, based in the Netherlands, announced on Thursday its intention to acquire a roughly 20% stake in Leapmotor. The two companies plan to establish a joint venture to sell Leapmotor products outside of China, initially focusing on Europe.

Leapmotor’s Recent Performance

Leapmotor made its debut in Hong Kong in September 2022 after successfully raising approximately HK$6.06 billion (US$774.8 million) through its initial public offering. In the third quarter, the Chinese company delivered 44,325 vehicles, representing a nearly 25% increase compared to the previous year. Revenue for the quarter rose by 32% year-on-year, amounting to CNY5.66 billion.

Jiahui Huang

Related posts

Alaska Air Group Inc. to Acquire Hawaiian Airlines

1 Mins read
Alaska Air Group Inc. has recently announced its plan to acquire Hawaiian Airlines in a deal worth approximately $1.9 billion. The transaction…

The State of the U.S. Labor Market

2 Mins read
This week, all eyes will be on the U.S. labor market as the Federal Reserve’s December meeting approaches. The release of November…

Ceres Power Holdings Faces Revenue Setback

1 Mins read
Ceres Power Holdings, a leading fuel-cell technology company, experienced a sharp decline in its shares on Friday. The company announced that its…

Leave a Reply

Your email address will not be published. Required fields are marked *