Battery maker CATL expected to launch at least $4bn Hong Kong listing

Hong Kong — Chinese battery maker CATL is launching its Hong Kong public offering on Monday, aiming to raise at least $4bn at about a 5% discount to its domestic share price, three people with knowledge of the deal said on Sunday.

CATL’s Shenzhen-listed shares last traded at 248.27 yuan on Friday.

The company has finalised investor briefings ahead of book building, having secured around $2.6bn from cornerstone investors, the three sources said, declining to be named as the information was not yet public.

Cornerstone investors include Kuwait Investment Authority and China’s oil major Sinopec, which committed $500m each, and a vehicle under Hillhouse Investment which committed $200m, two of the sources said.

CATL did not immediately respond to a Reuters request for comment.

The cornerstone investors did not immediately comment.

The discount and cornerstone line-up indicate strong demand from investors for one of the world’s dominant battery makers despite geopolitical and trade tensions.

Hong Kong shares of a company typically trade at a discount compared with its mainland stocks. Investors are usually offered stock at a cheaper price in offshore listings as an incentive to buy into the share offering.

At around 5%, the discount is significantly tighter than previous major deals like Midea Group, which last year sold its shares in Hong Kong at a 20% discount to the trading price of its mainland-listed shares.

Investors have already lodged indicative orders with the deal's bookrunners that would cover the deal “multiple times”, according to two of the sources.

CATL’s book building also comes as US and China relations remain fraught and officials from both countries met in Geneva at the weekend for trade talks.

The company was placed on a US Defence Department list in January of Chinese companies it says work with China's military. CATL said it was “not engaged in any military-related activities”.

The tariffs imposed by Trump in April would further weigh on battery imports from China, but CATL has said the impact on its US business will be minimal as the US market accounts for only a small part of its business.

CATL’s book building is expected to last until the end of Wednesday and the listing is scheduled for May 20, two of the sources said.

CATL’s deal would be the largest listing in Hong Kong since Midea Group raised $4.6bn in an initial public offering last year.

Reuters