CATL Poised to Hire Bank of America, CITIC, and JPMorgan for Hong Kong Listing
Contemporary Amperex Technology Co. Ltd., the world’s leading electric-vehicle battery maker, is on the verge of engaging Bank of America Corp., China International Capital Corp., CSC Financial Co., and JPMorgan Chase & Co. as lead arrangers for a second listing in Hong Kong this year, according to insiders familiar with the matter.
While CATL’s main listing is currently situated on the Shenzhen stock exchange, the company has been exploring a second listing in Hong Kong to increase its global accessibility and capital base. The move is aimed at raising at least $5 billion for CATL, which would make it one of the largest offerings in Hong Kong in recent years.
The deliberations surrounding this endeavor are ongoing, with details such as the size of any offering, lineup of banks, and timeline yet to be determined. However, sources indicate that other banks may also be added to the mix, pending a final decision.
This development comes amidst a surge in deal activity in Hong Kong, driven by China-domiciled companies seeking second listings in the city. Among those considering this move are Seres Group Co., Eastroc Beverage Group Co., and Foshan Haitian Flavouring & Food Co., according to previous Bloomberg reports.
CATL’s decision to explore a second listing follows its board approval in December, pending shareholder and regulatory approvals. The company’s shares have declined by 7.2% this year, with the firm boasting a market value of approximately $150 billion.
What This Means for CATL and the Market
The recent actions of CATL demonstrate the company’s aspirations to expand its global presence and augment its capital base through strategic initiatives like dual listings. By engaging banks such as Bank of America, CITIC, CSC Financial, and JPMorgan, CATL is likely seeking to tap into a broader investor pool and bolster its corporate profile.
CATL’s market performance this year reflects the volatility experienced by several other major players in the electric-vehicle sector. Despite this decline, the company remains one of the world’s leading battery manufacturers, providing crucial supplies to giants such as Tesla Inc.
CATL is also grappling with allegations linking it to China’s military and subsequent blacklisting alongside Tencent Holdings Ltd. However, CATL has repeatedly stated that its activities do not involve any military-related undertakings.
Impact on Deal Activity in Hong Kong
The proposed listing by CATL underscores the rising trend of China-based companies exploring second listings in Hong Kong this year. As a key financial hub with close economic ties to mainland China, Hong Kong’s allure as an investment destination is strengthening for domestic Chinese firms seeking increased exposure and growth opportunities.
Among other companies that have reportedly set their sights on a second listing in Hong Kong include Seres Group Co., Eastroc Beverage Group Co., and Foshan Haitian Flavouring & Food Co. These corporations, joined by others like Huawei Technologies Co.’s partner Seres Group Co. and condiment maker Eastroc Beverage Group Co., reflect the intensifying interest from Chinese companies in tapping into international investors to fuel their growth agendas.
Market Implications
This move would not only be a strategic coup for CATL but also serves as evidence of Hong Kong’s attractiveness for cross-listed offerings, attracting global investors and facilitating access to capital. By participating in this large Hong Kong deal that may raise at least $5 billion if executed successfully according to current expectations it could bring new revenue opportunities.
This will not only help strengthen its market position and expand investor base but also provides an opportunity for CATL to gain credibility among a broader range of investors, thus enhancing its financial position through improved liquidity and visibility.