Chinese battery giant CATL makes its debut on the Hong Kong stock exchange on Tuesday, with the firm aiming to raise $4 billion in the largest initial public offering (IPO) in the city so far this year.
A global leader in the sector, CATL produces more than a third of all electric vehicle (EV) batteries sold worldwide.
Buoyed by a rapid growth in China’s domestic electric vehicle sector, it now works with major brands including Tesla, Mercedes-Benz, BMW and Volkswagen.
The company is already listed in Shenzhen, and its plan for a secondary listing in Hong Kong was announced in a December filing with the stock exchange.
According to a prospectus filed last week, the firm will offer approximately 117.9 million units priced at up to HK$263 per share ($33.8) for total expected proceeds of HK$31.01 billion.
Founded in 2011 in the eastern Chinese city of Ningde, Contemporary Amperex Technology Co., Limited (CATL) has been aided by strong financial support from Beijing, which has sought in recent years to shore up domestic strength in certain strategic high-tech sectors.
It has also weathered a fierce price war in China’s expansive EV sector that has put smaller firms under huge pressure to compete while remaining financially viable.
Its net profit jumped 32.9 percent in the first quarter, with sales rising by 6.2 percent year-on-year to 84.7 billion yuan.
And funds raised from a secondary listing could be used to accelerate CATL’s overseas expansion, particularly in Europe.
The battery giant is building its second factory on the continent in Hungary after launching its first in Germany in January 2023.
In December, CATL announced that it would work with automotive giant Stellantis on a $4.6 billion factory to make EV batteries in Spain, with production to begin by the end of 2026.
Tuesday’s blockbuster listing comes as Hong Kong’s stock exchange is eager for the return of big-name Chinese listings in hopes of regaining its crown as the world’s top IPO venue.
The Chinese finance hub saw a steady decline in new offerings since Beijing’s regulatory crackdown starting in 2020 led some Chinese mega-companies to put their plans on hold.
In a list issued in January by the US Defense Department, CATL was designated as a “Chinese military company”.
The United States House Select Committee on the Chinese Communist Party highlighted this inclusion in letters to two US banks in April, urging them to withdraw from the IPO deal with the “Chinese military-linked company”.
But the two banks — JPMorgan and Bank of America — are still on the deal.
Beijing has denounced the list as “suppression”, while CATL denied engaging “in any military related activities”.
According to Bloomberg, CATL plans to make the deal as a “Reg S” offering, which doesn’t allow sales to US onshore investors, limiting the company’s exposure to legal risks in the United States.
