CATL plans minimal discount for Hong Kong share sale

In early May 2025, Chinese battery giant CATL is preparing for a substantial $5 billion listing in Hong Kong, marking a significant financial event as it would be the largest new share sale in the region since 2021. The company has informed prospective investors that they can expect the shares to be offered at a discount of under 10% compared to CATL's Shenzhen-traded shares. Sources indicate that the company is aiming for a discount in the mid-single digits, which may not meet some investors' expectations for a larger discount. This ongoing negotiations highlight the complexities of offshore listings in Hong Kong, which often come with incentives in the form of discounted shares to attract investment. Moreover, CATL is strategically seeking cornerstone and anchor investors to commit to about half of the shares being offered, which indicates a focus on securing strong financial backing before the official book building process begins next week. These efforts reflect the company's intent to have a successful launch amidst variable market conditions, particularly as CATL's share prices have seen fluctuations recently, increasing by 2.33%, yet remaining down nearly 11% for the year. These dynamics also resonate with broader trends in the market, where companies like Midea Group previously offered their Hong Kong shares at much steeper discounts, around 20%. The battery maker's ambitious plans for capital raised through this listing also include significant investments, one of which is earmarked for a new battery production facility in Hungary valued at €7.3 billion. The combination of a shrinking discount and an ambitious funding strategy presents a dual narrative of opportunity and challenge as CATL navigates its public listing process.