On June 22, Leap Motor fell 5.03% in regular trading, trading at HKD 34.0/share, with turnover of HKD 114 million. The decline was driven by a broad-based selloff across the Hong Kong-listed auto sector, compounded by company-specific regulatory pressure on its proposed private placement.

On the sector front, Hong Kong auto stocks suffered steep losses, with Geely Auto down approximately 8%, Great Wall Motor down nearly 5%, and BYD and NIO both declining over 4%. Industry headwinds include weakening demand — May auto retail sales fell 16.1% year-over-year — alongside raw material cost escalation and an ongoing price war eroding margins. Domestic auto sales for January through May totaled 8.147 million units, down 20.6% year-over-year.

At the company level, Leap Motor's proposed RMB 6.744 billion private placement recently received regulatory feedback from the CSRC, with four key inquiries targeting the reasonableness of gross margin declining from 14.5% in full-year to 9.4% in Q1, profitability sustainability given a Q1 net loss of RMB 390 million, fundraising necessity given prior unused proceeds, and control structure stability. The stock has now halved from its August high of HKD 76.3, with founder share purchases totaling HKD 720 million failing to arrest the decline.

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