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China’s battery leader CATL surges on debut in biggest listing of 2025

May 20, 2025
in Finance
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China’s battery leader CATL surges on debut in biggest listing of 2025
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Shares in leading Chinese battery maker CATL rose 12.6 per cent as trading began on Tuesday and retail investors followed up with strong demand for the biggest listing of the year to date globally.

The secondary offering in Hong Kong raised at least $4.6bn, with the amount set to rise to $5.3bn if an option allowing underwriters to sell more shares than planned is exercised. It is among the largest offerings in Hong Kong by Chinese companies already listed on the mainland in recent years, with CATL also quoted in Shenzhen.

Founder Robin Zeng banged a gong to celebrate the start of trading at the Hong Kong stock exchange. He was joined by Hong Kong financial secretary Paul Chan and the deputy mayor of the coastal city of Ningde in south-eastern China, where the company has its headquarters. 

CATL is not satisfied with being “just a battery component manufacturer”, Zeng said in a speech on Tuesday, adding that the company is poised to be the “pioneer” of the zero-carbon economy.

CATL is the world’s largest electric-vehicle battery group. A supplier to Tesla, BMW and Volkswagen, the cash-rich company had sought an offshore listing to raise non-renminbi funding for its overseas expansion, notably a $7.3bn factory in Hungary.

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The listing had the support of American banks, while a US asset management firm was a key investor in the listing despite the geopolitical tensions swirling around the deal.

In January, the battery maker was added to a Pentagon blacklist of companies with ties to the Chinese military, although it has denied any such links.

A Republican lawmaker in April urged JPMorgan Chase and Bank of America to halt work on the listing, in a warning sign of the politicisation of such capital markets deals. The US lenders remained as lead bankers on the transaction, along with state-backed China International Capital Corporation and China Securities.

Demand was boosted by global investors’ growing shift out of American assets, including the US dollar, according to analysts. 

Market participants suggested the listing played a role in pushing up the Hong Kong dollar exchange rate earlier in May as investors in the offering bought Hong Kong dollars and speculators bet on it to rise, forcing the Hong Kong Monetary Authority to intervene and buy almost US$17bn to hold down the exchange rate.

“We are in this kind of unique scenario, where you have a well-known company issuing new shares, also at a time when you have a macro factor where investors want to diversify away from the US dollar-related assets,” said Jason Lui, head of Asia-Pacific equity and derivative strategy at BNP Paribas. 

Analysts and deal participants said they believed heightened demand enabled CATL to price at the top end of HK$263 a share — only a roughly 7 per cent discount to the price at the close on Monday in Shenzhen. Chinese “A-shares” on mainland exchanges typically trade at a double-digit percentage premium to their “H-share” equivalents in Hong Kong, and initial public offerings are usually priced at a discount to entice buyers.

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Chinese battery manufacturer CATL’s domestic car business chief technology officer Gao Huang speaks at CATL Tech Day

Chinese oil company Sinopec, the Kuwait Investment Authority sovereign wealth fund and Asian fund Hillhouse Investment invested before the shares went public as so-called cornerstone investors. They were joined by US-owned Oaktree Capital Management and Lingotto, an investment vehicle backed by the Italian industrialist Agnelli family, as well as units of two Chinese state-owned groups, Postal Savings Bank of China and insurer Taikang Life. 

One person familiar with the deal told the Financial Times that other US investors chose to wait to invest until after the listing in order to reduce scrutiny from Washington. 

Meanwhile, many onshore American investors will not have access to the shares, given the listing was filed under a “Reg S” rather than “144A” regulation under US securities law. This exempts CATL from some disclosure obligations and means US investors without offshore accounts are barred from investing.

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