The world's largest electric vehicle battery manufacturer CATL is pursuing a Hong Kong stock market listing and is seeking to raise substantial capital. This listing is expected to be the largest initial public offering (IPO) in the Hong Kong stock market since 2021.
On the 11th (local time), major foreign media outlets, including the Financial Times (FT) and Bloomberg, reported that CATL applied for a secondary listing on the Hong Kong Stock Exchange. Currently, CATL shares are listed on the Shenzhen Stock Exchange. According to the documents submitted by CATL to the Hong Kong Stock Exchange that day, CATL selected JPMorgan, Bank of America, China International Capital Corporation (CICC), and China Securities International as its lead underwriters for the Hong Kong listing. Additionally, Goldman Sachs, Morgan Stanley, and UBS are expected to participate in this transaction.
FT commented, "It is noteworthy that despite the U.S. government's adding CATL to the list of corporations affiliated with the Chinese military last month, major American investment banks are participating in this IPO."
CATL is aiming to raise funds for overseas business expansion, including the construction of new production facilities in Hungary. FT reported, citing sources, that CATL could raise up to $700 million (approximately 700 billion won) if market conditions are optimal. Earlier, Morgan Stanley estimated that this listing could be as large as $7.7 billion (approximately 11.1842 trillion won). If CATL's IPO proceeds as planned, it is expected to be the largest public offering on the Hong Kong Stock Exchange since the listing of Kuaishou in 2021.
CATL, a key supplier for Tesla, saw a surge in revenue last year. According to SNE Research, CATL accounted for over one-third of global battery shipments in the third quarter of last year, more than double that of the second-place BYD.
CATL is one of several Chinese corporations expected to list in Hong Kong this year. Recently, mainland Chinese corporations have been showing interest in the Hong Kong stock market for fundraising aimed at overseas expansion. FT projected that the Hong Kong IPO market would recover to about $20 billion (approximately 29 trillion won). Although Hong Kong has long established itself as a major fundraising market for global corporations, the tightening of capital controls in China has made it increasingly difficult for mainland corporations to raise funds overseas, which has led to a contraction in the IPO market.
However, there are analyses that suggest it is uncertain whether this IPO will have a positive impact on the Hong Kong investment banking sector. Gary Ng, chief economist at Natixis, told FT, "It is too early to say that Hong Kong has fully recovered," adding, "While CATL's Hong Kong listing still shows that Hong Kong provides a favorable environment for Chinese corporations to raise funds overseas, investors remain cautious due to China's economic slowdown and geopolitical risks."