Battery Giant CATL Files for Hong Kong Listing in Potential City's Largest IPO Since 2021

Contemporary Amperex Technology Co. Ltd. (CATL), the world's leading electric vehicle (EV) battery manufacturer, has filed for a Hong Kong listing, aiming to raise more than $5 billion. This move could potentially make it the city's largest initial public offering (IPO) since 2021. The listing is expected to fund CATL's international expansion and overseas project development, supporting its long-term global strategy.



CATL's decision to list in Hong Kong aligns with several key factors that support its long-term global strategy:

1. Funding for Overseas Production Capacity and International Business Expansion: CATL aims to raise more than $5 billion from the Hong Kong listing, which will be used to fund overseas production capacity and international business expansion. This aligns with the company's strategy to increase its global presence and tap into new markets (Source: CATL's Hong Kong listing announcement).
2. Growing Overseas Revenue: Overseas markets contribute more than 30 percent of CATL's revenue, indicating the importance of international expansion for the company's growth. The listing will provide additional capital to support this growth (Source: CATL's Hong Kong listing announcement).
3. Established Global IPO Hub: The Hong Kong Stock Exchange is a global IPO hub, having raised HK$79 billion in 2024, up 70.6 percent year-on-year. Listing in Hong Kong will provide CATL with access to a larger pool of investors and enhance its global visibility (Source: CATL's Hong Kong listing announcement).
4. Strong Financial Performance: Despite a 12 percent year-on-year revenue decline in the first three quarters of 2024, CATL's net profit rose 15.6 percent to 36 billion yuan, supported by 264.7 billion yuan in cash reserves as of September 30. This strong financial performance demonstrates the company's ability to raise funds through an IPO (Source: CATL's Hong Kong listing announcement).



CATL's planned IPO in Hong Kong is expected to be the city's biggest initial public offering in four years, aiming to raise at least $5 billion (approximately 36.5 billion yuan). This is a significant development in the global battery market, as CATL is the world's largest electric vehicle (EV) battery maker. The company's listing is likely to be the largest in Hong Kong since the $5.4 billion IPO of China Tower in 2018.

In comparison, other Chinese lithium battery firms have already listed or are planning to list in Hong Kong. China Aviation Lithium Battery (CALB) and Rept Battero Energy are already listed, while ZEnergy applied for a listing in July 2024. The Hong Kong Stock Exchange remains a global IPO hub, raising HK$79 billion in 2024, up 70.6 percent year-on-year.

The performance of these listings can provide valuable insights into the market's appetite for Chinese lithium battery firms. For instance, CALB's stock price has been volatile since its listing, reflecting the ups and downs in the EV market and the company's financial performance. Rept Battero Energy, on the other hand, has seen a more stable performance, indicating the potential for steady growth in the sector.

CATL's planned IPO is a testament to the company's strong market position and growth potential. Despite a 12 percent year-on-year revenue decline in the first three quarters of 2024, CATL's net profit rose 15.6 percent to 36 billion yuan, supported by 264.7 billion yuan in cash reserves as of September 30. This demonstrates the company's ability to maintain profitability even in challenging market conditions.

In conclusion, CATL's planned IPO in Hong Kong is a significant event in the global battery market, and its performance will be closely watched by investors and industry observers. The success of the IPO will depend on various factors, including market conditions, investor sentiment, and CATL's ability to execute its growth strategies. The performance of other Chinese lithium battery firms listed in Hong Kong can provide valuable insights into the market's appetite for these companies and the potential for growth in the sector.