China's CATL jumps in Hong Kong debut in world's biggest listing this year
HONG KONG: Shares of Chinese electric vehicle battery giant CATL opened 12.50 per cent higher than the subscription price on Tuesday after the company raised US$4.60 billion in its Hong Kong listing, the largest in the world this year.
CATL shares started trading at HK$296.00 each in Hong Kong after the firm sold its shares at HK$263.00 apiece in the listing.
Hong Kong's Hang Seng Index was up about one per cent in early trading.
CATL, which is also listed in Shenzhen, sold 135.60 million shares in Hong Kong to raise US$4.60 billion, marking the largest listing in the city since Midea Group raised the same amount last year. CATL's Shenzhen stock was down about 0.50 per cent on Tuesday.
The institutional tranche of the Hong Kong deal was oversubscribed 15.20 times, according to CATL's filings, while the retail portion was 151 times oversubscribed.
The company said most of the funds would be used for construction of a factory in Hungary, part of its plan to make batteries in Europe for automakers such as BMW, Stellantis and Volkswagen.
"The Hong Kong stock listing means our wider integration into the global capital market and a new starting point for us to promote the global zero-carbon economy," CATL Founder and Chairman Robin Zeng said at a listing ceremony in Hong Kong.
CATL had aimed to raise about US$4 billion in the listing but increased the size of the deal following strong demand from investors.
A so-called "green shoe option" can be exercised that would take the size of CATL's raising to US$5.30 billion.
At that size, it would be the largest listing in Hong Kong since Kuaishou Technology raised US$6.20 billion in 2021, according to LSEG data.
TRADE TRUCE MOMENTUM
CATL's bookbuild had been open for a day when the US and China announced a brief truce in the trade war that had roiled global financial markets since early April.
The US will cut extra tariffs it imposed on Chinese imports last month from 145 per cent to 30 per cent for the next three months, the two sides said last week, while Chinese duties on US imports will fall to 10 per cent from 125 per cent.
The move created some extra momentum for CATL, whose bookbuild had already been covered with pre-commitment orders when the deal launched last Monday, according to two sources with direct knowledge of the bookbuilding process.
The tariffs pause prompted some global long-only investors who had previously not bid for CATL stock in the Hong Kong listing to place orders, they added.
CATL did not respond to a request for comment.
CATL's net profit in the first three months of 2025 rose 32.90 per cent year-on-year to 14.00 billion yuan (US$1.91 billion), its fastest pace in nearly two years.
It has been extending its lead in the electric vehicle battery market with a 38 per cent share globally in 2024, up from 36 per cent a year ago, according to data from SNE Research.
The demand for CATL shares was driven by increasingly positive sentiment towards China from global investors that had started to emerge since the start of the year despite the tariff war, according to the sources.
They said a decision to restrict US onshore investors from buying CATL stock did not dent the demand for the shares.
US investors with offshore accounts could still participate, and some did so despite CATL being placed on a US Department of Defense list in January of companies accused of working with the Chinese military.
CATL said in its Hong Kong listing documents it was working with US authorities to have the "false designation" removed.
More than 20 cornerstone investors subscribed for US$2.60 billion of CATL's Hong Kong shares, led by the Kuwait Investment Authority and Chinese oil giant Sinopec, according to CATL's prospectus.
"The context of what is happening in the US and associated uncertainty, many investors including sovereign wealth funds must be considering to shift some weight off the West and move to Asia," said Investory analyst Devi Subhakesan, who publishes on Smartkarma.
"CATL offers a long-term big-ticket investment opportunity in a strong growth sector for large funds and investment houses."
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