China’s CATL sees shares rise almost 18% in Hong Kong on EV increase

Shares of the world’s largest battery producer Modern Amperex Know-how rose over 18% of their Hong Kong buying and selling debut on Tuesday, as buyers wager on the corporate’s skill to trip the increase in digital autos.

Shares have been final buying and selling at 308 Hong Kong {dollars} apiece on the Hong Kong inventory alternate, in contrast with the preliminary public providing value of HK$263 {dollars} per share.

CATL IPO raised HK$35.7 billion ($4.6 billion) in line with an organization submitting, reportedly making it the most important international itemizing in 2025. CATL shares, which had opened decrease on mainland China’s Shenzhen inventory alternate, reversed course to rise 1.5% to 264 Chinese language yuan.

“I feel that because the H (Hong Kong) shares proceed to carry out strongly, that may pull up the A (mainland China) shares,” Neil Beveridge, senior analysis analyst at Bernstein, informed CNBC’s “The China Connection.”

“For the H shares to be buying and selling above the A shares simply reveals how distinctive the demand is for this firm, significantly from international buyers,” he added.

CATL mentioned in its Hong Kong submitting that 90% of the funds raised will go towards constructing its upcoming manufacturing facility in Hungary, geared toward supplying batteries to European automotive purchasers together with StellantisBMW and Volkswagen.

“Europe is an exceptionally vital marketplace for CATL,” mentioned Beveridge, including that the corporate’s development in China was going to gradual over the approaching years because of already excessive gross sales penetration. “Europe’s solely at about 20-25% (gross sales) penetration, so there’s nonetheless numerous development there to return,” he added.

The corporate’s push into Europe coincided with international expansions from main Chinese language EV makers reminiscent of BYD. These efforts additionally come amid elevated scrutiny from the U.S. and EU, which positioned punitive tariffs on EVs made in China final yr, citing unfair commerce practices.

CATL discovered itself within the crosshairs of U.S.-China commerce earlier this yr, with the Pentagon placing it on a watchlist in January over suspected hyperlinks to China’s army — allegations the corporate has rejected.

In line with Invoice Russo, founder and CEO of funding advisory agency Automobility, the watchlist designation, coupled with Trump’s newest tariffs on China, might complicate the corporate’s U.S.-related enterprise.

Nonetheless, the influence on its international ambitions will doubtless be restricted except broader multilateral restrictions comply with, as CATL’s core technique stays targeted on markets reminiscent of Europe and rising areas, he mentioned.

In March, CATL posted a 9.7% drop in its 2024 annual income, hit by intense competitors in China’s electric-vehicle market that pressured the world’s high battery producer. Nonetheless, the corporate’s internet revenue went up by 15% yr over yr.

Demand for electrical autos in China, a vital marketplace for CATL, gained momentum final yr on the again of a mix of subsidies and shopper buy incentives. EV gross sales in China surged to 11 million in 2024 — a 40% enhance in comparison with the earlier yr, knowledge from U.Okay. analysis agency Rho Movement confirmed.

“We’re a giant believer and investor in CATL in our international EV technique. It is simply phenomenal, it is a ‘should personal firm,’ in my view, together with BYD for buyers within the area,” mentioned Brendan Ahern, chief funding officer at KraneShares.

Financial institution of America, China Worldwide Capital Company, Goldman Sachs, Morgan Stanely, JPMorgan Chase have been the joint lead mangers for the Hong Kong providing.

Talking on CNBC’s Squawk Field Asia on Tuesday, Andy Maynard, managing director and head of equities at China Renaissance, mentioned that the CATL’s IPO reveals that buyers nonetheless look to China to search out high quality performs regardless of latest commerce tensions between Beijing and Washington.

Correction: This story was revised to precisely replicate the leap in shares at market open.