China’s Tianqi Lithium Eyes HK’s Largest IPO for 2022

tianqi-factory

One of China’s biggest lithium companies is set to raise over $1 billion by listing on Hong Kong’s Hang Seng index.

Tianqi Lithium, possibly one of the world’s largest producers of lithium compounds for rechargeable batteries, filed a revised prospectus on Sunday, June 19th, after it passed a listing hearing in Hong Kong. The company previously received approval to sell shares on the Hang Seng from China’s primary securities regulatory agency.

Is It the Right Time for an IPO?

However, financial experts question the timing of Tianqi’s fundraising efforts. 

At the moment, the global economy is not ideal, what with the current conflict between Russia and Ukraine, mounting supply chain and power generation issues affecting the manufacturing sector, and rampantly surging inflation rates in the United States and elsewhere in the world.

Indeed, Hong Kong’s stock market has been severely impacted by these global issues. In the year-to-date period, companies have only been able to raise $2.4 billion collectively in secondary stock listings, over 90% lower than the value posted this time last year. 

However, it appears that Tianqi Lithium will continue to push for its bid to raise at least $1 billion through the listing.

Gearing Up for Growth

Before its current fundraising initiative, Tianqi Lithium applied for a listing on the Hang Seng back in 2018 to raise a similar amount to pay for a minority stake purchased in SQM, a lithium production and distribution company in Chile. However, the listing was shelved despite initial approval by the government regulatory agency.

The proceeds from this fundraising round are expected to pay off Tianqi’s remaining debt of around $4 billion and finance the construction of a new lithium carbonate manufacturing facility in Sichuan Provinceís Anju District.

Tianqi Lithium isn’t exactly a new player in the market, however. The company has been around for nearly three decades and, as previously stated, is one of Chinaís largest industrial lithium producers. 

It has holdings in several Australian lithium mines. The metal sourced from these mines has been used for producing glassware and industrial ceramics and battery production for electric vehicles.

Last year, the company doubled its revenue to around $1.13 billion, reporting a total profit of $626 million at the end of the 2021 fiscal year.