Battery Giant CATL Applies for Hong Kong IPO... Secures Overseas Investment Funds

The world's largest electric vehicle battery manufacturer, China's CATL (Ningde Times), is knocking on the door of the Hong Kong stock market.

According to Bloomberg and The Wall Street Journal (WSJ) on the 12th, CATL submitted its listing application to the Hong Kong stock market the day before.

Reuters Yonhap News

CATL is expected to be the biggest IPO in the Hong Kong market in four years. Bloomberg previously reported that CATL could raise more than $5 billion (approximately 7.266 trillion KRW) through the IPO. If this proceeds as planned, it would be the largest since Kuaishou raised $6.2 billion (approximately 9.0123 trillion KRW) in 2021. According to sources, CATL hopes to raise up to $7 billion (approximately 10.1738 trillion KRW) if market conditions are optimal. Morgan Stanley previously estimated that CATL could raise up to $7.7 billion (approximately 11.1912 trillion KRW) through the IPO.

Bank of America (BoA), China International Capital, CSC Financial, and JPMorgan Chase are participating as joint bookrunners. Goldman Sachs, Morgan Stanley, and UBS Group are also involved.

CATL supplies batteries to major automakers such as Tesla, Stellantis, and Volkswagen, and is also listed on the Shenzhen stock exchange in mainland China.

The reason CATL is pursuing a dual listing on the Hong Kong stock market is to secure funds for overseas investment. CATL stated that it plans to use the funds raised through this IPO to expand its business in Europe. The company is currently building factories in Hungary and Spain.

Last month, the U.S. Department of Defense added CATL to the list of "Chinese military companies" cooperating with the Chinese People's Liberation Army. Although it is not immediately subject to direct sanctions, U.S. companies tend to avoid doing business with companies on this list. Due to the difficulty in securing funds amid rising geopolitical tensions, CATL is pushing for a secondary listing.

Bloomberg stated that CATL is expected to lead the recovery of the Hong Kong IPO market this year. The scale of Hong Kong IPOs in 2024 reached $10 billion, about twice that of the previous year, but it is still low compared to the average annual $30 billion recorded over the 10 years before the COVID-19 pandemic.