CATL is going for an IPO in Hong Kong, and the order amount from institutions has exceeded over 300 billion.

The Hong Kong stock market is about to welcome the largest IPO project in nearly three years.

On May 12th, CATL issued an announcement stating that it will be officially listed on the Hong Kong Stock Exchange on May 20th. On the day the announcement was released, CATL officially launched its share offering and plans to end the subscription on May 15th and announce the winning lottery results on May 19th.

This time, CATL intends to issue 117.9 million H-shares, with an upper limit of the issue price of HK$263 per share, equivalent to approximately RMB 243. At this price, CATL is expected to raise HK$30.718 billion in funds, equivalent to approximately RMB 29 billion.

In contrast, before CATL issued this announcement, that is, on the closing day of May 9th, the price of its A-shares was approximately RMB 248 per share, and the H-shares had only a discount of about 6% compared to the A-shares. Even on May 12th, when the price of CATL's A-shares rose to approximately RMB 254, the discount was only about 11%. Such a stock pricing strategy reflects CATL's confidence in its own market appeal.

If CATL exercises the over-allotment option and the adjustment right for the offering volume, the total maximum number of shares to be issued will be 156 million, and the amount of funds to be raised will be HK$35.3 billion, equivalent to approximately RMB 32.5 billion. This is the largest IPO project in terms of fundraising scale in the Hong Kong stock market in nearly three years.

However, despite this, the shares issued in CATL's Hong Kong IPO only account for 2.61% of its enlarged share capital, and the equity of the original shareholders has not been significantly diluted.

Before the Hong Kong IPO, Zeng Yuqun, the chairman, was the largest shareholder of the company, holding 23.27% of CATL's shares; the second, third, and fourth largest shareholders held 10.66%, 6.45%, and 4.58% respectively, and other A-share shareholders held 55.04% of the equity; after the Hong Kong IPO, the equity of shareholders such as Zeng Yuqun and other A-share shareholders will be diluted to 22.66%, 10.39%, 6.29%, 4.46%, and 53.60% respectively, and H-share shareholders will hold 2.61% of the equity.

Among the shares that CATL plans to issue, 65.7% are taken up by cornerstone investors. This round of CATL's IPO has attracted 23 cornerstone investors, including foreign institutions such as Oaktree Capital and the Kuwait Investment Authority, as well as Chinese institutions such as Sinopec, Jinglin, and Boyu Capital. These cornerstone investors have subscribed for a total of RMB 18.8 billion worth of shares. Among them, Sinopec, the Kuwait Investment Authority, and Hillhouse Capital are the top three investors. Sinopec and the Kuwait Investment Authority have each subscribed for US$500 million worth of shares, equivalent to approximately RMB 3.6 billion, and Hillhouse Capital's investment is US$200 million, equivalent to approximately RMB 1.4 billion.

In addition to cornerstone investors, other institutions and retail investors are also quite enthusiastic about CATL. The Futu client shows that as of now, the order amount of retail investors has exceeded HK$140 billion, that is, RMB 129.2 billion. Non-cornerstone investor institutions and retail investors together have subscribed for more than HK$530 billion worth of CATL shares, equivalent to approximately RMB 489.2 billion.

It is worth mentioning that no matter how much the retail investors oversubscribe, this funds cannot fully flow into CATL's account.

According to the rules of the Hong Kong Stock Exchange, the cumulative shares that retail investors can subscribe for are only 10% of the shares issued by the company, and they need to draw lots to complete the subscription. However, a secondary market insider revealed that considering the enthusiasm of retail investors' subscriptions, CATL will allocate 17.5% of the shares back to retail investors. That is to say, in the end, even if cornerstone investors take up 65.7% of the shares, retail investors take up 17.5%, and the remaining non-cornerstone investment institutions take up the rest of the shares.

CATL said that 90% of the funds raised from the Hong Kong stock market will be invested in the construction of the first and second phases of the Hungary energy storage project.

By the end of 2024, CATL had invested approximately 700 million euros in this project, equivalent to approximately RMB 5.6 billion. The planned investment for the first-phase project is 2.7 billion euros, equivalent to approximately RMB 21.8 billion, and it is expected that the factory construction and production line commissioning will be completed in 2025; the planned investment for the second-phase project is 2.1 billion euros, equivalent to approximately RMB 16.9 billion.

On the other hand, CATL's first-quarter financial report for 2025 shows that the cash flow from operating activities in the first quarter was RMB 32.868 billion, and the cash reserve was RMB 286.3 billion. Compared with the hundreds of billions of funds required for the Hungary energy storage project, CATL's existing funds seem to be completely sufficient to cope with it. Therefore, the greater purpose of its Hong Kong IPO is to open up international financing channels and build a springboard for going global.

In the short term, the European market is a blue ocean with almost no competitors for CATL. There are no strong local battery manufacturers in Europe, and domestic second- and third-tier battery manufacturers currently do not have the abundant resources like CATL to build overseas factories. According to the EU's "Battery Act" which has strict requirements for local production, enterprises without local factories will find it difficult to enter the supply chain of European car manufacturers. Therefore, CATL is temporarily the only choice for European enterprises.

In addition, this round of CATL's IPO may also have a certain impact on other battery manufacturers in the Hong Kong stock market. Considering the relatively low liquidity of the Hong Kong stock market, now that there is a CATL with strong market appeal, it may be more difficult for second- and third-tier battery manufacturers to raise funds in the future.