Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest electric vehicle battery manufacturer, has launched a secondary listing in Hong Kong aiming to raise up to HK$31 billion (approximately $4 billion), with the potential to exceed $5 billion if demand prompts underwriters to exercise an over-allotment option.
According to the prospectus released on May 12, CATL plans to sell 117.9 million shares at a maximum price of HK$263 each, with trading scheduled to begin on May 20. The Shenzhen-listed battery giant, valued at over 1.1 trillion yuan ($150.6 billion), is raising funds to finance its €7.6 billion ($8.5 billion) battery production facility in Hungary—a project expected to generate nearly 10,000 jobs upon completion and significantly boost CATL’s presence in the European EV supply chain.
The offering has already drawn firm interest from approximately two dozen cornerstone investors, including China’s state-owned Sinopec Group, Kuwait Investment Authority, and private equity firm Hillhouse Group. These investors have committed to subscribing to HK$20.4 billion worth of shares based on the upper pricing band and are contractually obligated to hold their shares for at least six months.
However, pricing dynamics suggest investor caution. At a 1.4% discount to CATL’s Shenzhen close last Friday, the maximum price contrasts with precedent secondary listings—most notably Midea Group’s 25% discount offered in its Hong Kong debut in 2023. Market analysts like Kenny Ng from Everbright Securities International argue that the minimal discount could limit broader demand, particularly from institutional investors seeking upside in a market currently marked by valuation discipline.
Investor access is also constrained by regulatory considerations. CATL’s offer is structured under Regulation S, excluding participation from U.S. onshore investors. Regulation S provides exemption from certain U.S. securities registration requirements but also reflects a defensive posture in response to intensifying Sino-American tensions.
The U.S. Department of Defense labeled CATL a “Chinese Military Company” in January, citing alleged ties to China’s defense sector—allegations the company has denied. Despite this designation, both Bank of America and JPMorgan Chase remain among the deal’s lead underwriters, alongside CICC, Goldman Sachs, and UBS. The involvement of American financial institutions has sparked scrutiny from U.S. lawmakers, who warned of reputational and regulatory risks.
CATL acknowledged geopolitical friction in its prospectus, highlighting trade and tariff-related risks, especially as global EV supply chains become increasingly politicized. Although the company stated that revenue from China-made exports to the U.S. remains limited, it also noted that “tariff policies have been rapidly evolving,” with potential implications across multiple jurisdictions. Ongoing negotiations between the U.S. and China over trade rules, including tariffs that date back to the Trump administration, remain a source of strategic uncertainty.
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