Hong Kong’s largest listing this year should have offered a no-brainer for local investors. China’s Tianqi Lithium raised about HK$13.5bn (US$1.7bn). As a play on the clean energy, electric vehicle narrative it looked a smart bet. A surprising 11 per cent plunge, in morning trade, for Wednesday’s debut offers a window into what other listing candidates in Hong Kong should expect.

Tianqi Lithium’s share price did recover during the day but only closed at its offer price of HK$82. That is 43 per cent below the group’s Shenzhen-listed shares closing price. While some discount to mainland-listed stocks is not uncommon due to the varying capital control restrictions in the two markets, that gap does look big.

This poor showing is also surprising given the record global demand for lithium carbonate, a crucial ingredient for electric car batteries. Spot lithium prices have renewed record highs since September, gaining more than 1,000 per cent in the past two years. Tianqi Lithium had priced its offering at the top of the suggested range. After all, its Shenzhen-listed shares have rallied more than two-thirds over one year, as have those of local peers.