CATL to have smaller HK listing than anticipated
CATL, the Chinese battery giant, recently announced its plans for a secondary listing in Hong Kong to support its international expansion efforts. Despite speculation about raising a massive $5 billion, the company reassured everyone that the fundraising amount will not be significant, considering its healthy cash reserves of 234.95 billion yuan as of Sept 30.
In fact, CATL’s main goal with the Hong Kong listing is to develop an international capital operation platform and enhance its global footprint, not just to raise funds. The company’s net profit for the third quarter saw a 26 percent increase year-on-year, reaching 13.1 billion yuan, even as revenue dropped 12.5 percent to 92.3 billion yuan compared to the same period last year.
CATL, which stands for Contemporary Amperex Technology Co., is the leading electric vehicle (EV) battery maker worldwide, holding a 36.8 percent market share in EV batteries for the first 10 months of 2024. The company’s efforts to expand globally include establishing battery facilities overseas, with a recent joint venture with carmaker Stellantis Group to build a battery plant in Spain with an investment of up to 4.1 billion euros.
According to experts like Gary Ng, from Natixis, CATL’s move to list in Hong Kong is strategic, providing the company with additional funding channels for its international operations. The secondary listing in Hong Kong, scheduled to be reviewed at CATL’s shareholders’ meeting in January, is part of a trend where Chinese companies are accessing global capital markets to enhance their brand power and visibility.
Experts like Ouyang Shirui from Soochow Securities Hong Kong Research see CATL’s listing in Hong Kong as a significant move among Chinese mainland enterprises aiming to raise their international profile and access global investors. While uncertainties remain in the market, CATL’s entrance into Hong Kong’s international platform is just the beginning, with potential fundraising opportunities through share placements in the future when market conditions improve.
