Chinese electric vehicle maker SERES (HKG:09927) saw its shares plummet 7% in its Hong Kong Stock Exchange debut on Wednesday, significantly underperforming initial expectations. The stark decline comes after the company raised HK$14.02 billion (approximately $1.84 billion) in its initial public offering (IPO).

SERES had set its final offer price at HK$131.50 per share, but the stock opened at HK$128.90, already below the IPO price. The 7% drop from the offer price indicates a much steeper decline than the nearly 2% fall that was initially anticipated, highlighting the challenging market conditions for new listings in the current economic climate.

The company's IPO had shown strong initial interest, with the Hong Kong public offer portion being 132.68 times oversubscribed. Notable cornerstone investors, including Chongqing Industrial Investment Parent Fund and Schroder Investment Management, were allocated a combined total of 48.8 million shares, representing 44.95% of the global offering. Despite this apparent enthusiasm, the stock's performance on its first trading day suggests investors may be adopting a more cautious stance towards the EV sector.

SERES' disappointing debut occurs against a backdrop of broader market weakness, with Hong Kong's Hang Seng Index opening 0.97% lower on the same day. The significant underperformance of SERES compared to both its offer price and the wider market may raise concerns about investor appetite for new EV stocks and the overall health of the IPO market in Hong Kong.