Shares of Jiangxi Ganfeng Lithium Co. Ltd. closed 29% lower on its Hong Kong debut Oct. 11, coinciding with a rout spreading through global equity markets following the worst single-day decline on Wall Street.
The company, one of China's largest lithium producers, opened the day at HK$15.30 and fell to an intraday low of HK$11.06 in the afternoon session, compared with its initial public offering price of HK$16.50 apiece. Prior to its H-share listing, the company's A-shares on the Shenzhen Stock Exchange also faced a selloff as it was at a premium over its Hong Kong IPO price.
Shares of Ganfeng closed the day at HK$11.76, with 40.8 million shares changing hands. Daily turnover came in at HK$539.9 million.
Chairman Li Liangbin blamed the company's poor debut performance on the stock selloff sweeping the globe. He said after the company's listing ceremony at the Hong Kong Stock Exchange that he is confident about the company's share price in the long term with investors become more familiar with the company.
"I am very confident about our company's results and the performance of our stocks in the future. I believe today's loss [in the share price] was mainly caused by the dive in the whole market."
The company, a supplier to Tesla Inc. and Bayerische Motoren Werke AG, said it is also seeking collaboration with other carmakers but declined to disclose further details at this stage.
When asked if the company is concerned about the recent weakness of the lithium carbonate price, Li said he is optimistic on the demand for lithium products and expects prices to stabilize in the short term.
Although some Chinese companies have been under pressure recently due to the amplified trade tension between the world's two biggest economies, the company said its business, with a focus in Asia, has not been affected by the trade spat.
Li also said the company's deal with Sociedad Quimica y Minera de Chile SA, which was signed in August, will be completed at the end of this month. Under the agreement, Ganfeng will hold a 37.5% stake in the Caucharí-Olaroz lithium brine project in Argentina. It will use about 22% of its IPO proceeds to provide financial assistance to Lithium Americas Corp., which will hold the remaining stake at the Caucharí-Olaroz project, on its CapEx for construction.
Ganfeng Lithium said it will also use IPO proceeds to acquire upstream assets and expand production capacity.