China EV player Leapmotor targets Hong Kong IPO
LeapMotor has filed for an IPO in Hong Kong, putting it on course to become the fourth of China's "new force" electric vehicle (EV) manufacturers to go public.
The other three - Nio, Xpeng, and Li Auto - completed IPOs in the US, but Nio and Xpeng have since added secondary listings in Hong Kong. LeapMotor, WM Motor, and Hozon New Energy are the best-funded players among those still under private ownership.
LeapMotor is primarily backed by renminbi-denominated vehicles, including government-linked funds. Sequoia Capital China and CICC Capital are among its supporters.
Founded in 2015, the company was a spinoff from Dahua Technology, a partially state-owned company that sells video surveillance products and services. Several co-founders of Dahua started the EV business with support from the parent, which remains the largest shareholder after the management team, according to a filing.
LeapMotor claims to be the most vertically integrated EV developer in China, with its power, autonomous driving, and smart cockpit systems all designed and developed in-house.
It focuses on the mid-to-high-end segment, with vehicles priced at CNY150,000 (USD 22,000) to CNY 300,000. Deliveries in 2021 amounted to 43,738 units, up 444% year-on-year, making LeapMotor the fastest-growing of China’s leading pure-play EV makers, according to Frost & Sullivan.
The company ranked 18th in China's new energy vehicle (NEV) market by sales in 2021 with a 1.6% share. It rose to 13th (and 2.2%) in the first half of 2022.
LeapMotor commenced deliveries of its first mass-produced model in 2019. Four have been launched to date. It has a wholly-owned manufacturing plant in Zhejiang province with a production capacity of 200,000 vehicles per year and a second plant is planned for the same province.
Revenue reached CNY 3.1bn last year, up from CNY 631m and CNY 117m in 2021 and 2020. In the first three months of 2022, sales hit CNY 2bn, a 7x increase on the same period in 2021. However, the business is still loss-making. Net losses rose from CNY 901m in 2019 to CNY 1.1bn in 2020 to CNY 2.8bn in 2021.
The penetration rate of NEVs in China’s passenger vehicle market increased from 2.4% in 2017 to 16.0% in 2021, according to Frost & Sullivan. It is expected to surge from 22.4% in 2022 to 50.1% in 2026.
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