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CATL Targets Less Than 10% Discount for $5B Hong Kong Listing, Eyes Anchor Investors

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Contemporary Amperex Technology Co. Ltd. (CATL) is expected to offer less than a 10% discount on its upcoming $5 billion Hong Kong share offering, according to sources familiar with the matter. The move would mark the largest Hong Kong listing in four years, as the world’s leading EV battery maker courts investors ahead of next week’s book-building process.

According to three sources, the discount to CATL’s Shenzhen-listed shares (300750.SZ) could land in the mid-single-digit range, with two sources saying the company hopes to avoid steep markdowns seen in recent offshore Chinese listings. However, some investors are pushing for a discount of at least 10%, one source noted.

CATL plans to allocate around half of the offering to cornerstone and anchor investors, reflecting a strategy used in major listings to stabilize pricing and demand. Final pricing has not yet been confirmed.

Background and Market Context:

  • CATL shares in Shenzhen rose 3% on Wednesday to 238.61 yuan, though the stock remains down 10.3% year-to-date.

  • Historically, Hong Kong shares are priced at a discount to their mainland counterparts, often 20–30% or more.

  • For comparison, Midea Group priced its $4 billion Hong Kong offering last year with a ~20% discount.

  • Other major listings like China Tourism Group Duty Free and S.F. Holding saw discounts as high as 28%–37% during their bookbuilds.

Despite aiming for a tighter discount, CATL’s strong fundamentals and dominant 38% global battery market share—up from 36% in 2023—may support investor appetite. The company serves high-profile clients including Tesla, Stellantis, and NIO, and has grown rapidly in the energy storage systems segment.

CATL reported a 32.9% rise in Q1 2025 net profit, reaching 14 billion yuan ($1.91 billion), marking its fastest growth in nearly two years.

Proceeds from the Hong Kong listing will help fund CATL’s 7.3 billion euro ($8.28 billion) battery plant in Hungary, furthering its global manufacturing footprint.

If completed, the deal would be the biggest in Hong Kong since Kuaishou Technology’s $6.2 billion IPO in 2021.

CATL Reports Slowest Profit Growth in Six Years Amid Price War in China’s EV Market

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Contemporary Amperex Technology Co. Ltd. (CATL), China’s leading electric vehicle (EV) battery manufacturer, has reported a 15% increase in net profit for 2024, marking its slowest growth in six years. The company’s net profit reached 50.7 billion yuan ($7.01 billion), falling short of its projected growth range of 11.1%-20.1%. Meanwhile, revenue decreased by 9.7%, marking its first revenue decline since it began releasing operating figures in 2015.

CATL attributed the revenue drop to declining battery prices prompted by a price war in China’s EV market, which pressured EV makers to reduce component costs. Despite rising sales volumes, lower prices of raw materials like lithium carbonate resulted in a fall in operating income.

For the fourth quarter, CATL reported a 13.6% increase in net profit to 14.7 billion yuan, down from the 26% growth seen in the previous quarter. Revenue for Q4 shrank by 3.1% to 103 billion yuan, marking the fifth consecutive quarterly decline.

The price war in China’s EV market has forced CATL to adjust its battery prices to defend market share. However, the company benefitted from a 17.6% reduction in the cost of its power battery business, outpacing an 11.3% drop in revenue from this segment.

Globally, CATL solidified its position as the dominant player in the EV battery market, extending its market share to 38% in 2024, up from 36% in 2023, according to SNE Research. BYD followed with 15%, while LGES saw its share fall to 10% from 13%.

CATL experienced faster growth in the energy storage system battery market, which accounted for 22.4% of total shipments, up from 19.4% in 2023. The company has also expanded beyond batteries, unveiling a new EV chassis in December and seeking to enter the power grid sector.

Additionally, CATL is investing internationally, with a 7.3 billion euro battery plant in Hungary to supply automakers such as Mercedes-Benz and BMW, along with a jointly-owned battery plant with Stellantis in Spain. The company is also pursuing a listing in Hong Kong to raise funds for its Hungarian plant, aiming to secure at least $5 billion.

Scania Steps In to Support Struggling Battery Maker Northvolt

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Truck manufacturer Scania has taken an active role in assisting Northvolt, the troubled electric vehicle battery maker, in an effort to improve production quality and secure its financial future. Since November, Scania has deployed staff to Northvolt’s Ett plant in northern Sweden to work alongside managers and help standardize operations, according to internal documents reviewed by Reuters.

Northvolt, once seen as Europe’s best hope for an EV battery leader, has faced persistent quality and production issues. Its financial situation remains precarious, with only weeks of funding left unless it secures an additional $1.29 billion. Last year, the company filed for Chapter 11 bankruptcy in the U.S. after failing to reach a financing deal with key investors, including Volkswagen, Goldman Sachs, and Scania itself.

Scania, which owns a stake in Northvolt and relies on it for battery supply, has played a hands-on role in the production process, a level of involvement beyond what other customers, such as Audi and Porsche, have shown. The truckmaker’s employees have been embedded at Northvolt’s plant under a program called “P.2 100k,” aimed at ramping up weekly battery cell production to at least 100,000 units. Improving quality is crucial for Northvolt to access additional funding, with Scania linking loan disbursements to production milestones.

Industry experts note that while Scania lacks deep expertise in battery manufacturing, its operational efficiency and experience in scaling up production could provide valuable guidance. Workers at Northvolt remain hopeful that Scania’s intervention will help stabilize the company and prevent its collapse. A failure of Northvolt could leave Scania scrambling for alternative battery suppliers and force Europe to rely more heavily on Chinese manufacturers such as BYD and CATL.