On the first day of trading in Hong Kong, shares of Contemporary Amperex Technology Co. Ltd. (CATL), the largest electric vehicle battery manufacturer globally, experienced a significant surge, climbing as much as 18%. This performance is particularly impressive considering the ongoing geopolitical uncertainties that many companies face. CATL’s entry into the Hong Kong stock market is a striking example of a Chinese firm advancing its global ambitions amidst challenges, including trade tensions with the United States.
The trading day commenced with CATL shares opening at 296 Hong Kong dollars, approximately $37.8. This figure notably exceeded the subscription price of 263 Hong Kong dollars, or $33.6, marking a successful stock listing that garnered $4.6 billion in the previous week. As per data from Refinitiv, the shares reached a peak of 311 Hong Kong dollars during the trading session, underscoring strong investor interest and confidence in the company.
What makes CATL’s listing particularly noteworthy is its scale—it stands as the largest global offering this year. This move signals a determined effort by Chinese companies to pursue international market opportunities despite the prevailing trade tension with the U.S. Specifically, earlier this year, CATL was placed on a list by the Pentagon, which designated it as a company working in collaboration with China’s military—claims that CATL has resolutely denied.
The political climate faced by international businesses was further illustrated when, just last month, the House Select Committee on China urged U.S. investment banks like JPMorgan Chase and Bank of America to retract their involvement in underwriting CATL’s Hong Kong listing. Nonetheless, both financial institutions chose to proceed with the deal, highlighting the complications and dualities present in today’s international business landscape.
At a listing ceremony held at the Hong Kong stock exchange, CATL’s founder and chairman, Robin Zeng, articulated the company’s vision. He emphasized that the Hong Kong stock listing signifies CATL’s deeper integration into international capital markets. Zeng asserted that the company is evolving from being merely a battery manufacturer to providing comprehensive system-level solutions. He firmly stated CATL’s commitment to becoming a zero-carbon technology company.
The company enjoys robust sales among major electric vehicle manufacturers, including industry giants such as Volkswagen, Stellantis, and BMW. Notably, CATL’s international revenues accounted for over 30% of its total income last year, as disclosed in a filing made on May 12. Highlighting the necessity of the listing, the National Business Daily, a state-run Chinese newspaper, mentioned that this capital infusion will be crucial for CATL to sustain its global expansion, particularly in the face of limited foreign currency reserves and escalating geopolitical complexities.
The Hong Kong listing not only strengthens CATL’s foreign currency reserves, acting as vital resources for its overseas projects, but it also provides opportunities to leverage international capital to enhance its management of cross-border resources. This perspective was shared by an unnamed CATL representative, who underscored the strategic importance of this capital boost.
In recent weeks, CATL has also unveiled a groundbreaking EV battery with a notable ability to cover 320 miles on a five-minute charge, surpassing rival BYD’s technology, which offers a range of 250 miles in a similar timeframe. As of 2024, CATL continues to hold the title of the world’s largest electric battery supplier, capturing 38% of the global market, according to SNE Research.
This recent listing is CATL’s second foray into the public market, having raised $6.7 billion from a previous IPO in Shenzhen back in 2022. The company originally announced its intentions to pursue a listing in Hong Kong last December, a strategic move to expand its operations globally, particularly in Europe where it is also expanding facilities in Hungary.
Currently, CATL operates a network of 13 battery production facilities worldwide, including in locations such as China, Germany, and Hungary. The firm’s collaboration with Stellantis includes plans for a joint venture to establish a battery plant in Spain, alongside a separate project in Indonesia.
Despite the temporary rollback of tariffs between the U.S. and China, certain tariffs enacted during Donald Trump’s administration on vehicles and auto parts remain in effect. In response to the uncertainties surrounding tariff policies, CATL has indicated it cannot predict their future impact on business. However, it acknowledged that revenue from products exported directly from China to the U.S. has constituted a relatively small portion of its overall revenue in recent years.
In conclusion, CATL’s successful debut on the Hong Kong stock exchange and its strategic moves towards international expansion illustrate its resilience and adaptability in a challenging global environment. As the company continues to innovate and grow, it faces the ongoing complexities of political and economic climates while positioning itself as a leader in the transition towards sustainable energy solutions. The future trajectory of CATL and similar companies may well define the next chapter of the electric vehicle industry on an international scale.