World’s biggest EV battery maker CATL shares surge in Hong Kong after $4.6bn IPO

HONG KONG: Shares in CATL, the world’s largest maker of batteries for electric vehicles, jumped more than 16% on Tuesday in its Hong Kong trading debut after it raised about $4.6 billion in the world’s largest initial public offering this year.  

The strong reception for the Chinese company, Contemporary Amperex Technology Co, in Hong Kong suggests there is still demand among international investors for leading Chinese manufacturers despite trade tensions between Beijing and Washington.  

It sold more than 135 million shares at their maximum offer price of 263 Hong Kong dollars ($33.60) each. Its shares rose after opening at 296 Hong Kong dollars ($37.80), 12.5% higher than their offer price. They closed 16.4% higher.  

CATL also has shares listed in Shenzhen, a business hub neighbouring Hong Kong. They initially fell but later edged 1.2% higher.  

A supplier to automakers such as Tesla, Volkswagen, BMW, Mercedes-Benz, Ford, Toyota and Honda, CATL held nearly a 38% global market share for EV batteries in 2024, its listing documents showed.  

The company has faced pressure from the US. In January, the US Department of Defense added it to a list of companies it says have ties to China’s military, an accusation that CATL denied. It called the inclusion a "mistake."  

In April, John Moolenaar, chairperson of the US House Select Committee on China, wrote to the CEOs of JPMorgan Chase & Co and Bank of America, demanding that the two American banks withdraw from their work on CATL’s IPO. However, the two banks remained involved.  

In the US, Ford Motor Co is licensing technology from CATL to build batteries, but the plan faces resistance from some Republican lawmakers, who have expressed concern that the Chinese company could benefit from US tax dollars.  

Because the US has listed CATL as having ties to China’s military, the share offering excluded onshore US investors. However, many large US institutional investors have offshore accounts, allowing them to participate.  

The company said it plans to use most of the net proceeds from its IPO to build its factory in Hungary, bringing it closer to the manufacturing facilities of its main European customers.  

Government officials, including Hong Kong’s Financial Secretary Paul Chan, attended its gong-striking ceremony in Central, the city’s vibrant business district, on Tuesday. The company’s chairman, Robin Zeng, said his business is committed to becoming a zero-carbon technology company.  

"Listing in Hong Kong means we are more broadly integrated into the global capital markets, and it’s also a new starting point for us to promote the global zero-carbon economy," Zeng said.  

Zeng, who trained as a physicist, helped found Amperex Technology Ltd. in 1999. It primarily engaged in research and development and the manufacturing of consumer lithium batteries. The company was sold to Tokyo-listed TDK Corporation in 2005, but Zeng continued to oversee the firm’s management until 2017, its listing documents state.  

In 2011, a team led by Zeng founded CATL, headquartered in his hometown of Ningde in Fujian province, southeast China. The literal meaning of the company’s Chinese name is "Ningde Era."  

CATL says it has the broadest coverage of EV battery users globally, with its batteries installed in over 17 million EVs, or one in every three EVs worldwide, as of the end of 2024.  

Terence Chong, executive director of the Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong, said Hong Kong has not seen an IPO of this size in a while, and the listing may boost such activity in the city.  

The exclusion of US investors had little impact, as there was sufficient demand for CATL’s offering, he said.  

The amount of funds raised through IPOs in Hong Kong rose 89% year-on-year in 2024 following a double-digit decline in 2023, according to Yujia Li, an analyst at the Hong Kong Financial Research Institute of the Bank of China.  

CATL recorded a profit of 55.3 billion yuan ($7.6 billion) in 2024, up 16.8% from 2023. Its listing surpassed JX Advanced Metals’ $2.9 billion IPO in Japan in March, which was previously the largest this year, according to Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs.

By RSS/AP