CATL's Hong Kong IPO news: It is reported that the discount is less than 10%, with Qatar Investment Authority, Sinopec, and Hillhouse Capital possibly participating
CATL may consider an IPO with a discount of less than 10% compared to A-shares, which is significantly lower than the over 20% discount of Midea Group (00300) during its IPO last year
On May 7th, Reuters cited sources stating that CATL is considering an IPO in Hong Kong with a discount of less than 10% compared to A-shares, which is significantly lower than the over 20% discount seen during Midea Group's (00300) IPO last year.
In addition, the Qatar Investment Authority (QIA), Sinopec (00386), and Hillhouse Capital are considering participating in CATL's Hong Kong IPO, with subscription amounts reaching hundreds of millions of dollars. It is reported that CATL has also negotiated with the Kuwait Investment Authority (KIA). Some institutions are expected to subscribe as cornerstone investors, while others will participate through regular international placements.
Currently, CATL has officially uploaded post-hearing documents to the Hong Kong Stock Exchange's "disclosure" platform on May 6th, indicating that it has passed the hearing by the listing committee.
Apart from China International Capital Corporation (CICC) and CITIC Securities, Bank of America and JP Morgan remain as joint sponsors for CATL. Goldman Sachs, Morgan Stanley, and UBS are also involved in this IPO. Earlier reports indicated that the chairman of the U.S. House China Special Committee sent letters to Bank of America and JP Morgan, requesting them to withdraw from CATL's Hong Kong listing project, but the latest information shows that both investment banks are still participating.
The post-hearing documents indicate that according to International Financial Reporting Standards, CATL's net profits for 2022, 2023, and 2024 are projected to be RMB 30.729 billion, RMB 44.702 billion, and RMB 52.033 billion, respectively. In the first quarter of 2025, CATL's revenue grew by 6.2% to RMB 84.7 billion, with revenue from power battery systems increasing by 14% to RMB 63.2 billion, benefiting from sales growth. Despite a decline in average selling prices, profits still grew by 31.9% to RMB 14.9 billion, mainly due to expanded sales volume and improved gross margins.
In response to the U.S. imposing a 145% import tariff on China, CATL stated that tariff policy changes are rapid, and the proportion of direct exports to the U.S. has been relatively small in recent years, but it is impossible to predict the potential impact of future tariff changes on its business.
The funds raised by CATL will be used to advance the construction of Phase I and Phase II of the Hungary project, as well as for working capital and general corporate purposes
