Contemporary Amperex Technology Co. has started taking investor orders for a Hong Kong stock offering that is likely to be the world’s biggest listing this year.
CATL, as the Chinese electric-vehicle battery giant is known, is seeking to raise as much as HK$41 billion ($5.3 billion), according to its listing document on April 12. That’s if the deal is upsized.
After the sale, CATL plans to use much of the proceeds for its ongoing international expansion in Europe, especially for a big factory in Hungary to supply top clients like Mercedes-Benz. That may help the company widen its lead in the industry, where it has a a market share of roughly 38 percent, comfortably ahead of its closest challenger, top EV maker BYD Co.’s 17 percent, according to SNE Research.
Under a first phase, the Hungary factory, in which it is investing 2.7 billion euros ($3.03 billion), is set to start producing batteries this year. CATL aims to begin construction on the second phase later this year.
The company has received enough investor interest for its Hong Kong share sale early on the first day the deal was launched on May 12, according to people familiar with the matter. The Fujian-based company is marketing shares at a maximum price of HK$263 each, or 1.4 percent lower than the close on May 9 in Shenzhen but roughly equivalent to the close on May 8. Pricing could be decided as soon as Tuesday and the stock is expected to begin trading May 20.
The share offering would more than double proceeds in Hong Kong’s market for listings this year, which Bloomberg Intelligence predicts will surge to more than $22 billion. The bonanza’s been driven by Chinese companies going ahead with their listing plans in the Asian financial hub despite the turmoil brought on by U.S. President Donald Trump’s tariffs, which have caused many deals to be postponed in America and Europe.
CATL is offering about 118 million shares in the base offering, which could increase to around 136 million if the company upsizes the deal by 15 percent. With a greenshoe option, the company would be selling nearly 156 million shares.
Cornerstone investors, which agree to hold shares from the deal for at least six months, have committed to buy about $2.6 billion worth of stock, according to the prospectus. They include Chinese state-owned oil company Sinopec, the Kuwait Investment Authority and alternative-asset manager Hillhouse Investment.
CATL said it was doing the deal in the form of a so-called Regulation S offering, which doesn’t allow sales to U.S. onshore investors and exempts the issuer from certain U.S. regulatory filing obligations, confirming an earlier Bloomberg News report. The limitations on certain types of U.S. investors indicates that US-China tensions may be spilling into the landscape for stocks and initial public offerings.