Unlock the Editor’s Digest without spending a dime
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
CATL, the world’s largest electrical car battery maker, has filed an software for a secondary itemizing in Hong Kong, in what may very well be the town’s largest inventory providing in years.
The itemizing of Up to date Amperex Expertise, which is a serious provider of Tesla, Volkswagen and different EV makers, has been lengthy awaited in Hong Kong and is anticipated to be one of many metropolis’s largest share choices since 2021.
CATL is considered one of a number of Chinese language firms anticipated to listing in Hong Kong this yr, with analysts anticipating a $20bn revival in exercise — principally from mainland-based firms in search of to increase overseas.
The Shenzhen-listed firm has appointed JPMorgan, Financial institution of America, China’s CICC and China Securities Worldwide as lead banks. It additionally appointed Goldman Sachs, Morgan Stanley and UBS to work on the deal.
The US banks are concerned regardless of CATL having final month been added to a US blacklist of companies deemed to be working with China’s navy.
CATL mentioned it was aiming to lift funds partially to spice up its worldwide enlargement plans, which embrace constructing a manufacturing web site in Hungary. It additionally plans a three way partnership in Spain with Stellantis and a mission in Indonesia.
The corporate redacted a number of key particulars from its publicly launched prospectus, together with the quantity of shares it could supply and the exact timetable.
The battery maker mentioned in December it deliberate to listing as much as about 5 per cent of its whole share capital in Hong Kong, however that underwriters would have the choice to extend this barely primarily based available on the market scenario.
One individual acquainted with the matter mentioned that CATL hoped to lift as much as $7bn if market circumstances had been optimum. Morgan Stanley has beforehand estimated the CATL itemizing may elevate as much as $7.7bn.
The surge in Hong Kong listings may enhance the town’s repute as a number one vacation spot for capital elevating, after years of skinny deal flows. In lots of circumstances Chinese language firms need to listing in Hong Kong to lift offshore funds, as a result of tight capital controls can hinder them transferring cash overseas.
However the restoration in listings might not translate to a boon for Hong Kong’s funding bankers. The FT reported last month that competitors from Chinese language banks had threatened to depress charges for the CATL itemizing.
“It’s too early to say Hong Kong is again,” Gary Ng, a senior economist at Natixis, instructed the FT.
The CATL itemizing “indicators that Hong Kong nonetheless has benefits for Chinese language companies in search of abroad funding”, Ng mentioned, however added that “fairness buyers stay sceptical of valuations because of decelerating progress in China and geopolitics”.
The providing comes as Hong Kong’s Cling Seng index has rallied by some 13 per cent up to now month amid larger optimism about Chinese language know-how and electronics shares after start-up DeepSeek final month overturned assumptions about US supremacy in AI.
CATL mentioned in its heavily-redacted inventory change filings that Washington’s inclusion of the corporate on the “Chinese language Navy Corporations” listing was “a mistake” and that it was “proactively participating with [the US defence department] to deal with the false designation”. It mentioned the designation solely stopped it doing enterprise with “a small variety of US governmental authorities”.
The corporate additionally flagged its publicity to geopolitics, such because the dangers of violent fluctuations in China’s forex — together with when it must convert renminbi to pay dividends in Hong Kong {dollars}.
CATL has been within the prime spot within the world EV battery marketplace for eight consecutive years and had a share of 38 per cent in 2024, based on knowledge from South Korean consultancy SNE Analysis.
Regardless of its dominant market place, the battery maker warned of a income drop of as a lot as 11 per cent for 2024, citing decrease product costs. CATL mentioned in a Shenzhen inventory change submitting in January that it anticipated to report internet earnings progress of as much as 20 per cent for final yr, its slowest tempo since 2019.
The corporate reported revenues of over $50bn in 2023 and has a market capitalisation of some $150bn primarily based on its Shenzhen itemizing.
