Staff Reporter
Shares of Contemporary Amperex Technology Co., Ltd. (CATL), the world’s largest battery manufacturer, jumped over 16% in their trading debut in Hong Kong on Tuesday.
Investors are optimistic about the company’s potential to capitalize on the expanding electric vehicle (EV) market.
The shares closed at HK$306.2 on the Hong Kong Stock Exchange, up from the initial public offering (IPO) price of HK$263 per share. This IPO raised HK$35.7 billion (approximately $4.6 billion), making it the largest global offering of the year.
While CATL shares opened lower on the Shenzhen stock exchange in mainland China, they rebounded to finish the day up 1.15% at 263 yuan.
Neil Beveridge, a senior research analyst at Bernstein, noted that strong performance in Hong Kong could also uplift the A shares on the mainland, highlighting exceptional demand from global investors.
In its Hong Kong filing, CATL indicated that 90% of the raised funds will be directed toward a new factory in Hungary, designed to supply batteries to European automotive clients like Stellantis, BMW, and Volkswagen.
Beveridge emphasized the importance of the European market for CATL, pointing out that while sales penetration in China is high, Europe still has significant growth potential at just 20-25%.
The company’s expansion into Europe aligns with the global growth efforts of leading Chinese EV manufacturers like BYD. Despite a 9.7% decline in projected annual revenue for 2024 due to fierce competition in China’s EV landscape, CATL reported a 15% year-over-year increase in net profit.
Demand for EVs in China surged last year, driven by subsidies and consumer incentives, with sales reaching 11 million in 2024—a 40% increase from the previous year, according to U.K. research firm Rho Motion.
Hong Kong’s Financial Secretary Paul Chan remarked in a blog post that CATL’s IPO is the largest stock fundraising event of the year, contributing to a total of over HK$60 billion raised in Hong Kong this year—more than six times the amount from the same period last year.
