Chinese battery giant CATL is set to make a significant splash in the financial markets with its upcoming Hong Kong listing. The electric vehicle battery manufacturer is looking to raise at least HK$31.01bn ($3.99bn) by offering 117.9 million shares at a maximum price of HK$263 each. If additional options are exercised, the listing could potentially swell to around $5.3bn.
The announcement of CATL’s listing has already had a positive impact on the company’s stock, as its Shenzhen shares climbed 3.6% following the news, surpassing the CSI300 index’s 0.9% rise. This listing marks the largest in Hong Kong since Midea Group’s $4.6bn raise last year.
Sinopec and Kuwait Investment Authority, along with over 18 cornerstone investors, have committed to purchasing approximately $2.62bn in shares. The offering also includes options to expand the share count by an additional 17.7 million, potentially raising an extra HK$4.65bn ($598m), as well as a greenshoe option for a further 17.7 million shares.
The pricing of the shares is expected to take place between Tuesday and Friday, with the final price to be revealed by 19 May. The majority of the proceeds, around HK$27.6bn, will be allocated towards CATL’s new Hungary factory, which aims to supply European automakers such as BMW, Stellantis, and Volkswagen. The first phase of production is set to begin this year, with the second phase’s construction starting later.
The Hong Kong shares will be priced at a slight discount to the Shenzhen stock if set at HK$263 each. CATL has also received a waiver from the Hong Kong Stock Exchange, allowing the company to forgo publishing a minimum sale price to avoid affecting its Shenzhen-listed stock.
The offering will allocate 109.1 million shares to institutional investors and 8.8 million for Hong Kong retail investors. Trading on the Hong Kong Stock Exchange is scheduled to begin on 20 May. However, US onshore investors are restricted from participating in the deal due to CATL’s placement on a US Defense Department list of companies allegedly linked to China’s military. CATL has stated that it is addressing this designation as it does not restrict the company from conducting business with entities other than a small number of US governmental authorities.
CATL’s listing coincides with US-China talks in Geneva aimed at de-escalating trade tensions, though high tariffs on goods from both nations remain in effect. The company is closely monitoring the evolving tariff policies and their potential impact on its business.
In conclusion, CATL’s Hong Kong listing represents a significant milestone for the company as it seeks to raise substantial funds for its expansion plans and solidify its position in the electric vehicle battery market. With strong investor interest and strategic partnerships in place, CATL is poised for continued growth and success in the coming years.
