CATL said to gain approval for $5b HK listing

China’s battery manufacturer CATL is expected to receive approval for its Hong Kong listing.

This listing aims to raise at least US$5 billion, according to sources familiar with the matter.

The city’s stock exchange is anticipated to grant approval on Apr. 10, 2025.

However, CATL has not issued a statement regarding this development.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ CATL’s market dominance persists despite growing headwinds

CATL has maintained its position as the global leader in EV batteries with a 37.9% market share, up 1.3 percentage points despite challenging market conditions 1.

The company’s financial resilience is evident in its 15% net profit growth to 50.74 billion yuan ($7 billion) in 2023, even as it experienced its first annual revenue decline (9.7%) since 2015 2.

This dominance has been built through strategic relationships with major automakers, exemplified by BMW increasing its order volume with CATL from €4 billion to €7.3 billion for battery cells from 2020 to 2031 3.

The Hong Kong listing comes at a critical juncture when CATL faces new challenges, including being designated as a “Chinese Military Company” by the U.S. Department of Defense, which restricts its dealings with the DOD 4.

Despite these obstacles, the company continues to benefit from strong domestic demand, with China experiencing a 40% increase in EV sales and CATL capturing 45% of battery installations in this market 2.

2️⃣ The $5 billion IPO signals confidence amid market turbulence

CATL’s planned Hong Kong listing would be the largest IPO in the city since Kuaishou Technology’s offering in early 2021, representing a significant vote of confidence in Hong Kong’s capital markets 5.

The timing is particularly notable as it comes amid significant market turbulence, with the Hang Seng Index experiencing substantial drops and ongoing concerns about the health of Chinese markets 5.

This move appears strategic as CATL positions itself to capitalize on projected industry growth, with the global lithium-ion battery market expected to expand from $91.93 billion in 2024 to $251.33 billion by 2035 at a CAGR of 9.6% 6.