(Yicai) Dec. 19 -- Shares of Chinese battery maker Rept Battero Energy, a unit of the world's largest nickel producer Tsingshan Holding Group, fell on their second day of trading in Hong Kong along with the broader market.

Rept Battero [HKG: 0666] closed down 0.6 percent at HKD18.66(USD2.39) a share today, paring its market capitalization to HKD5.73 billion (USD735 million), after the the company gained 2.6 percent in yesterday’s debut. The benchmark Hang Seng Index fell 0.8 percent.

Rept Battero plans to use 80 percent of the roughly HKD2.1 billion (USD295 million) raised in its initial public offering to expand production capacity at plants in Wenzhou, Foshan, and Chongqing, according to its listing prospectus. Ten percent will go to research and development and the same to working capital.

The Wenzhou-based company sold 116 million shares priced at HKD18.30 apiece in Hong Kong’s fourth-biggest public offering this year.

Set up in 2017, Rept Battero specializes in the research, development, and production of lithium-ion batteries for electric vehicles and energy storage systems. The firm has gained market share by selling its products for about 20 percent less than those of industry giant Contemporary Amperex Technology. From January to November, Rept Battero ranked seventh in China, coming in ninth for battery sales and third for storage system shipments.

The company has a supply chain advantage compared with other battery makers, an industry insider noted. The raw materials for lithium-ion batteries account for about 80 percent of the total cost, but Tsingshan, its controlling shareholder, is building a new energy materials supply chain, covering the mining and refining of nickel, lithium, cobalt, cathode and anode materials and electrolytes, the person said.

Before Rept Battero’s IPO, Tsingshan, which is also a major supplier and customer of the unit, owned 51 percent of Eternal Tsingshan Group, which had a 63 percent stake in Rept Battero.

The battery supplier had a net loss of CNY919 million (USD128.7 million) in the first half of this year on revenue of CNY6.6 billion (USD925.1 million), according to its prospectus, after a CNY451 million loss and CNY14.6 billion of revenue last year. The firm will likely become profitable in 2025, it said.

Editor: Martin Kadiev