Chinese electric-vehicle battery behemoth Contemporary Amperex Technology Co. Ltd. (CATL) has officially commenced taking investor orders for its highly anticipated Hong Kong stock offering, a deal poised to become the world’s largest listing so far this year.
The move signals strong momentum for Hong Kong’s IPO market, despite the ongoing global economic uncertainties fueled by US-China trade tensions.
Aiming for a multi-billion dollar haul
CATL is seeking to raise as much as HK$41 billion (approximately 5.3 billion), according to its listing document released Monday.
This top−end figure includes the potential for an upsized deal and the exercise of a green shoe option, building on a base offering of up to HK31 billion.
The Fujian-based company is marketing its shares at a maximum price of HK$263 each.
This price is slightly lower (1.4%) than its Friday closing price in Shenzhen but roughly aligns with Thursday’s levels.
Pricing for the Hong Kong shares could be finalized as early as Tuesday, with the stock expected to begin trading on May 20.
Hong Kong IPO market gets major boost
Successfully executed, CATL’s offering would more than double the total proceeds raised in Hong Kong’s new listings market this year.
Bloomberg Intelligence forecasts that the city’s IPO market could see a surge to over $22 billion in 2025, largely driven by Chinese companies proceeding with their listing plans in the Asian financial hub.
This trend persists despite the significant market turmoil caused by US President Donald Trump’s tariff policies, which have led to postponements of many listings in American and European markets.
In a sign of investor confidence, CATL’s existing shares rose as much as 3.4% in Shenzhen trading on Monday, outperforming the benchmark index.
The offering structure involves a base offering of about 118 million shares, potentially increasing to around 136 million if the deal is upsized by 15%.
With the full exercise of the greenshoe option, nearly 156 million shares would be sold.
CATL has already secured significant backing from cornerstone investors, who have committed to purchasing approximately $2.6 billion worth of stock and holding it for at least six months, according to the prospectus.
This influential group includes Chinese state-owned oil giant Sinopec, the Kuwait Investment Authority, and prominent alternative-asset manager Hillhouse Investment.
Notably, CATL is conducting the deal as a “Regulation S” offering, which restricts sales to US onshore investors and exempts the issuer from certain US regulatory filing requirements.
This confirms earlier reports by Bloomberg News and suggests that ongoing US-China tensions may be influencing the structuring of major capital market transactions.
Additionally, the company received a waiver from the Hong Kong exchange regarding the standard clawback mechanism, allowing institutional investors to retain a larger proportion of the shares allocated in the Hong Kong listing, even with high retail demand.
Navigating geopolitical headwinds
The path to this mega-listing has not been without its challenges.
In January, CATL was placed on a Pentagon blacklist due to allegations of links to the Chinese military – accusations the company has consistently and repeatedly denied.
This scrutiny extended to some of the banks involved in arranging the deal.
In April, a US congressional committee publicly urged JPMorgan Chase & Co. and Bank of America Corp. to cease their involvement with the listing due to these alleged military ties, which CATL again refuted.
Both American banks, however, have remained part of the underwriting syndicate.
Fueling global expansion
CATL intends to use a significant portion of the IPO proceeds to fund its ongoing international expansion, particularly in Europe.
A key project includes a large-scale factory in Hungary designed to supply major automotive clients like Mercedes-Benz.
This expansion is crucial for CATL to widen its already substantial lead in the global EV battery market, where it commands a market share of roughly 38%, comfortably ahead of its nearest competitor, BYD Co., which holds around 17%, according to SNE Research.
The CATL deal underscores Hong Kong’s continued appeal as a listing venue for major Chinese corporations.
The momentum appears set to continue, with reports suggesting Chinese cancer drugmaker Jiangsu Hengrui Pharmaceuticals Co. is also preparing for a significant Hong Kong listing this month.
Joint sponsors for CATL’s offering include China International Capital Corp. and China Securities International, alongside JPMorgan and Bank of America.
Goldman Sachs Group Inc., Morgan Stanley, and UBS Group AG are also involved in arranging the deal.
Underwriters are set to receive a fixed fee of 0.2% of the deal, with a potential additional 0.6% incentive fee.
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