CATL aiming to raise over $5 billion from HK listing

Contemporary Amperex Technology Co Ltd, the world's largest electric vehicle battery maker, has filed for a Hong Kong listing that is expected to be the city's biggest initial public offering in four years.

The long-awaited CATL listing aims to raise more than $5 billion, which the company said will fund overseas production capacity and international business expansion, supporting its long-term global strategy.

Already an A-share listed company, CATL's Hong Kong listing will attract more international capital, further diversifying its financing channels, said analysts.

According to public disclosures, as of June 2024, CATL had foreign currency balances of $6.74 billion and 3.86 billion euros ($4 billion), which were challenging to cover the hefty investments in Europe and other regions, as well as the ongoing need for overseas strategic expansion that often amount to billions of euros.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said CATL's Hong Kong listing is poised to assist the company in garnering funds on a global scale to support its endeavors in overseas research and development, production capacity expansion and market outreach. Additionally, the Hong Kong listing is expected to enhance CATL's brand influence in international markets, strengthening its global competitiveness.

"This listing opens avenues for financing. Given CATL's expansive global reach, substantial financial support is imperative, a need that can be met through a successful IPO. In addition, CATL's global expansion necessitates collaboration from diverse stakeholders. By opting for a Hong Kong listing, CATL can also engage with a broad spectrum of international investors. This move is pivotal in enhancing CATL's global standing," Zhou said.

In recent years, CATL has accelerated its overseas expansion efforts, establishing battery factories in European countries including Germany and Hungary. In December, CATL signed a joint venture agreement with Dutch automotive group Stellantis that will build a large-scale lithium iron phosphate battery plant in Zaragoza, Spain.

According to SNE Research — a South Korean company providing global market research and consulting services for rechargeable battery industries — CATL maintained its top position globally in terms of battery usage for electric vehicles from January to November 2024, witnessing a 28.6 percent year-on-year growth. Following CATL are BYD and LG Energy Solution.

Many major Chinese original equipment manufacturers such as Zeekr, Aito and Li Auto, operating in the world's largest EV market of China, have integrated CATL's batteries into their products.

Furthermore, prominent global OEMs including Tesla, BMW, Mercedes-Benz and Volkswagen have also chosen CATL's batteries for their EV models.