By Scott Murdoch
SYDNEY (Reuters) -Chinese battery giant CATL has started the process to list in Hong Kong by lodging its filings with regulators in a deal that is expected to raise at least $5 billion, according to two sources with direct knowledge of the matter.
The biggest battery maker in the world filed an application to list on the Hong Kong Stock Exchange on Tuesday, saying part of the funds raised will be used to build its 7.3 billion-euro ($7.53 billion) battery plant in Hungary. The filing did not identify how much would be raised in the listing.
CATL did not respond to a request for comment from Reuters on the potential size of the deal. The sources requested anonymity in order to discuss confidential information.
CATL’s planned float in the Chinese offshore market comes amid rising geopolitical tensions as the U.S. in January added Chinese tech companies including CATL and Tencent Holdings to a list of firms it says work with China’s military.
CATL said at the time it had not engaged in any military-related business or activity and thought the Department of Defence designation was a mistake. It said the decision did not restrict the company from conducting business in the U.S. and should not have an adverse impact on its operations.
“We are proactively engaging with DoD to address the false designation. We cannot guarantee that such attempts will be successful or that the relevant government agencies will not take any further actions,” CATL said in the filing. It said tariffs were a risk to its business given its global operations but did not identify President Donald Trump’s recent 10% tariffs on Chinese imports as a specific risk.
CATL said its EV batteries were used in about 17 million vehicles which represented one in every three EVs around the world. Its electric storage systems (ESS) batteries were used in more than 1,700 projects globally, it said.
A listing of the Shenzhen-listed firm would be the largest listing in Hong Kong in four years, according to Dealogic data. At $5 billion, it would be the biggest listing since Kuaishou Technology’s 2021 initial public offering that raised $6.2 billion, the data showed.
The city’s equity capital markets have languished in the past three years as a result of Chinese regulators slowing down the approval process and volatile global financial markets.
CATL’s Hong Kong listing plan also comes as the city sees increased interest for second listings from Chinese A-share companies, which are seeking to tap in to overseas liquidity.
CATL has a market capitalisation of 1.1 trillion yuan ($150.54 billion) and its Shenzhen shares are trading about 61% higher over the past year.
($1 = 7.3085 Chinese yuan renminbi)
($1 = 0.9689 euros)
(Reporting by Scott Murdoch in Sydney, additional reporting Brenda Goh in Shanghai and Ethan Wang and Shi Bu in Beijing; Editing by Kim Coghill, Kate Mayberry. Louise Heavens and Matthew Lewis)
