CATL plans to raise over $4 billion in Hong Kong listing

In May 2025, Contemporary Amperex Technology (CATL), the world's largest maker of electric vehicle batteries, embarked on a major capital-raising effort through a second listing in Hong Kong. The company aimed to raise at least HK$31.01 billion, approximately $4 billion, by offering 117.9 million shares at a maximum price of HK$263 each. Interest in the offering is significant, with more than 20 cornerstone investors, including Sinopec and Kuwait Investment Authority, poised to contribute approximately $2.62 billion by committing to buy shares. This move marks the most substantial new share sale in Hong Kong for the year, underlining CATL's aggressive expansion strategy amid a shifting global battery market. The deal could be further enhanced through an offer size adjustment option and a greenshoe option, which could boost the total size to approximately $5.3 billion. The company’s decision to proceed with the listing comes in the context of building a new factory in Hungary, which represents an investment of €7.6 billion, aiming to create nearly 10,000 jobs locally. Despite its strong market position, CATL faces challenges, particularly in relation to U.S.-China geopolitical tensions. U.S. onshore investors are restricted from participating in the Hong Kong listing, which may affect the overall demand. This situation stems from recent designations that have classified CATL as a “Chinese Military Company,” although CATL has denied any associations with military activities. As a result, significant concerns regarding regulatory and reputational risks have emerged, impacting the company’s ability to engage with U.S. investors directly. Furthermore, the prospectus notes the evolving landscape of U.S. tariffs and their potential impact on the company’s operational revenues. However, CATL asserts that only a minimal portion of its revenue is generated from exports of China-made products to the United States. The company is adapting by licensing its battery technology to key U.S. clients, such as Ford and Tesla, to aid their developments while facing scrutiny from U.S. lawmakers regarding its business practices. As public trading is set to begin on May 20, the outcome of CATL's listing will be pivotal for its strategic goals moving forward.