STLAM Stellantis NV

By Jiahui Huang

Zhejiang Leapmotor Technology's shares were lower at the mid-day break after initially rising on news of a 1.5 billion euro ($1.58 billion) investment by Stellantis in the Chinese electric-vehicle maker.

Leapmotor shares ended the morning session down 9.4% at 33.40 Hong Kong dollars, reversing course from early gains of as much as 11.5%.

Some of the whipsawing into negative territory arose from early investors in the company seeking an exit point, said Ke Qu, an analyst at CCB International Securities.

"The stock price is under pressure due to selling pressure from pre-IPO investors," Qu said in an email. "Most may think this partnership announcement creates [a] better exit window for their three-year or even longer investment."

Qu added that Leapmotor is relatively short on cash compared with other listed startups in China, and can benefit from a partner to leverage its exposure and competitiveness in European or U.S. markets.

"Greater access to [the] EU means better profitability than elsewhere in the world," she said.

Netherlands-based Stellantis said early Thursday that it is taking a roughly 20% stake in Leapmotor, with the companies planning to create a joint venture to sell Leapmotor products outside of China, starting with Europe.

Leapmotor debuted in Hong Kong in September 2022 after raising about HK$6.06 billion (US$774.8 million) in its initial public offering.

The Chinese company delivered 44,325 vehicles in the third quarter, up almost 25% from a year earlier. Revenue in the quarter rose 32% on the year to CNY5.66 billion.

Write to Jiahui Huang at jiahui.huang@wsj.com

(END) Dow Jones Newswires

October 26, 2023 01:50 ET (05:50 GMT)

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