CATL Surges 16.4% in Hong Kong Debut, Raising $4.6 Billion in World's Largest IPO of 2025

A Spectacular Debut: CATL's Hong Kong Listing Overview

In a remarkable display of investor confidence, Contemporary Amperex Technology Co., Limited (CATL), the world's largest electric vehicle battery manufacturer, made its Hong Kong stock market debut on Tuesday, May 20, 2025, with shares surging 16.4% above the initial offering price. This impressive performance came after the Chinese battery giant raised HK$35.7 billion ($4.6 billion) in what has become the largest initial public offering (IPO) globally this year.

CATL's shares began trading on the Hong Kong Stock Exchange under the stock code 3750, opening at HK$296 per share, representing a 12.5% premium over the subscription price of HK$263. Throughout the trading day, the stock climbed further, reaching as high as HK$311.40 before closing at HK$306.20. This strong performance reflects robust investor interest in the company despite ongoing geopolitical tensions between the United States and China.

The successful listing has effectively doubled Hong Kong's total proceeds from listings this year to $7.73 billion, compared to just $1.05 billion during the same period in 2024. This significant boost has helped Hong Kong regain its position as a leading global financial hub for new listings.

Behind the Scenes: The Road to CATL's Hong Kong IPO

CATL's journey to its Hong Kong listing was remarkably swift, taking just 128 days from initiation to completion. The company offered 135 million shares before the greenshoe option, with the price set at the upper limit of its marketing range at HK$263 per share. This pricing strategy demonstrated the company's confidence in investor demand, which proved well-founded as the institutional tranche of the offering was oversubscribed 15.2 times, while the retail portion saw an astounding 151 times oversubscription.

Retail investors in Hong Kong borrowed more than HK$282 billion in margin financing from brokerages to bid for CATL shares, representing 105 times the value of shares allocated to them in the offering. This extraordinary level of interest came despite CATL being placed on a Pentagon blacklist in January 2025, which identified the company as allegedly having connections to China's military—a claim that CATL has strongly refuted as a mistake.

The offering attracted a diverse range of investors from 15 countries and regions globally, including sovereign wealth funds, industrial capital, long-term institutions, insurance capital, and multi-strategy funds. This broad international interest highlights that for many investors, the opportunity to invest in a premier company at the forefront of electric vehicle innovation outweighed potential risks associated with ongoing Sino-U.S. tensions.

Strategic Significance: Why Hong Kong Matters for CATL

CATL's decision to pursue a secondary listing in Hong Kong represents a strategic move to access broader global capital markets. Already listed on the Shenzhen Stock Exchange since June 2018 (under the stock code 300750), CATL has become the first A-share company to seek a secondary listing in Hong Kong with a price cap for the issuance, and notably with zero discount to its A-share closing price on the day of setting the price cap.

Hong Kong's position as an international financial hub offers CATL a crucial platform to bolster its expanding production capabilities, supplier network, and talent acquisition. The listing provides CATL with an offshore fund-raising platform to support its international expansion plans, particularly as the company aims to strengthen its position in global markets amid intensifying competition in the EV battery sector.

Bonnie Chan, CEO of bourse operator Hong Kong Exchanges and Clearing, noted that more than 40 firms listed in mainland China are actively exploring Hong Kong listings, suggesting that CATL's successful debut could inspire other Chinese companies to follow suit. Wang Shuguang, a member of China International Capital Corp's management committee, expressed that CATL's listing could help revive Hong Kong's capital markets, demonstrating that domestically-listed leading industrial companies can be well-recognized by global investors in Hong Kong offerings.

CATL's Global Footprint and Market Position

As the world's dominant manufacturer of electric vehicle batteries, CATL commands nearly 38% of the global market share. The company has established itself as a critical supplier to major automotive giants including Tesla, Volkswagen, BMW, Mercedes-Benz, Toyota, and Honda. This position has been achieved through continuous innovation and substantial investment in research and development, with CATL investing over RMB 70 billion (approximately $10 billion) in R&D over the past decade.

CATL has built an impressive global presence with thirteen battery manufacturing bases worldwide and subsidiaries in strategic locations including Munich, Paris, Yokohama, and Detroit. The company's total number of patents granted and applied for globally exceeds 43,000, and it has led the industry in new patent applications for five consecutive years.

Beyond electric vehicles, CATL has also ranked first in the market share of global energy storage battery shipments for two straight years in 2022, and according to SMM, ranked first globally in terms of production volume of energy storage battery cells in the first half of 2023. This diversification into energy storage solutions positions CATL as a key player in the broader clean energy transition, not just in the automotive sector.

Expansion Plans and Use of Proceeds

CATL plans to allocate approximately 90% of the capital raised from its Hong Kong IPO toward constructing a new manufacturing facility in Hungary. This European plant is strategically positioned to produce batteries for European automotive manufacturers including Stellantis, BMW, and Mercedes. The expansion into Europe represents a critical component of CATL's global growth strategy, allowing the company to better serve European automakers while reducing supply chain risks and transportation costs.

The remaining funds will likely support CATL's ongoing research and development efforts, as the company continues to prioritize innovation as its core competitive advantage. CATL has been at the forefront of battery technology advancement, recently announcing that its newest battery model can achieve 320 miles of range after just five minutes of charging—a significant breakthrough in addressing one of the key barriers to wider EV adoption.

This international expansion comes at a time when CATL is facing increasing challenges in its domestic market, with intense price competition impacting profit margins across the industry. Despite experiencing a 9.7% decline in revenue for 2024 due to fierce competition within China's EV sector, CATL's net profit saw a year-on-year growth of 15%, demonstrating the company's ability to maintain profitability even in challenging market conditions.

Navigating Geopolitical Challenges

CATL's successful Hong Kong listing comes against a backdrop of complex geopolitical tensions between the United States and China. In January 2025, the U.S. Department of Defense designated CATL as a Chinese military company, implying its role in modernizing China's military—a designation that CATL has labeled a mistake and hinted at potential legal action against.

This designation attracted scrutiny from U.S. lawmakers, with the Republican chair of the House's special committee on China urging JPMorgan and Bank of America—two American banks that played a role in facilitating CATL's listing in Hong Kong—to withdraw from the IPO. In response to these pressures, CATL altered its listing structure in mid-May to exclude domestic U.S. investors from participation.

Despite these challenges, CATL's bookbuilding process benefited from a temporary truce in the U.S.-China trade conflict announced shortly before the offering. The United States declared it would reduce additional tariffs on Chinese imports from 25% to 7.5% for the upcoming three months, while China would lower its tariffs on U.S. goods from 25% to 10%. This development generated additional momentum for CATL's offering, encouraging some global long-only investors who had previously refrained from bidding to place orders for CATL stock.

CATL's Vision: Beyond Battery Manufacturing

At the listing ceremony in Hong Kong, CATL's founder and CEO Dr. Robin Zeng emphasized that CATL is more than just a battery component manufacturer, positioning the company as a system solution provider committed to becoming a zero-carbon technology enterprise. This vision extends beyond the production of batteries to encompass broader solutions for the global transition to clean energy.

Zeng announced that all of CATL's battery plants will achieve carbon neutrality this year, aligning with the company's strategic goals of achieving carbon neutrality in its core operations by 2025 and across the entire battery value chain by 2035. Furthermore, CATL aims to provide technologies and solutions to drive the transition of traditional industries such as steel, cement, and chemicals to new energy sources.

This ambitious vision reflects CATL's recognition that the future of energy extends beyond electric vehicles to encompass a comprehensive transformation of how energy is generated, stored, and utilized across all sectors of the economy. By positioning itself as a zero-carbon technology company rather than merely a battery manufacturer, CATL is setting the stage for long-term growth and relevance in a rapidly evolving global energy landscape.

Market Outlook and Investor Perspectives

Analysts remain optimistic about CATL's prospects despite the challenges it faces. Neil Beveridge, a senior research analyst at Bernstein, noted that the strong performance of CATL's Hong Kong shares could elevate its A-shares in Shenzhen, indicating extraordinary demand for CATL, especially among international investors.

According to Wan of Jefferies in Hong Kong, CATL's Hong Kong shares, valued at approximately 17 times current earnings, possess the potential for a 50% increase, backed by robust earnings and appealing valuations. Wan emphasized the limited opportunity for others to invest, describing CATL as an obvious buy.

The Chinese government's continued support for the battery sector as part of its strategic initiative to nurture important industries provides an additional tailwind for CATL. This approach has yielded significant results, with batteries being one area where China has established itself as a global leader, alongside electric vehicles, rare earth processing, and renewable energy.

As CATL continues to expand globally and innovate in battery technology, investors appear confident in the company's ability to maintain its market leadership position and capitalize on the growing demand for electric vehicles and energy storage solutions worldwide. The successful Hong Kong listing represents not just a financial milestone for CATL, but a significant vote of confidence in its long-term vision and strategy.