A Hong Kong IPO Brings A New Way To Bet On Rare Earth Metals

A Hong Kong IPO Brings A New Way To Bet On Rare Earth Metals
Andrew Rummer

about 2 years ago1 min

A new addition to Hong Kong’s stock market this week will offer investors a fresh way to bet on the boom in rare earth metals

JL MAG Rare-Earth Co. is already listed in Shenzhen, but from Friday it’ll also join the Hong Kong exchange with the ticker 6680, making its stock much easier to access for non-Chinese investors. The producer of magnetic rare earth materials will join rival China Rare Earth Holdings as one of the few globally available plays on these key ingredients for fuel cells and batteries.

JL MAG raised about $540 million selling shares in this week’s initial public offering (IPO), although it had originally hoped to raise as much as $650 million. The chart above shows how the company’s Shenzhen-listed stock has dropped 15% this year – although it’s still up 10-fold since its debut on the mainland in September 2018. 

Rare earth metals have been one of the buzziest sectors of recent years, due to their use in everything from electric vehicles to air conditioners. Those wanting to bet on the continuing boom could also use thematic exchange traded funds (ETFs) like the VanEck Rare Earth/Strategic Metals ETF (ticker: REMX). 

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