By Scott Murdoch and Julie Zhu
HONG KONG (Reuters) -Shares of Chinese electric vehicle battery giant CATL traded as much as 18.4% above the subscription price on Tuesday after the company raised $4.6 billion in its Hong Kong listing, the largest in the world this year.
CATL shares reached HK$311.40 each in Hong Kong after the firm sold its shares at HK$263 apiece in the listing.
Hong Kong’s Hang Seng Index was up about 1.3% during the session.
CATL, which is also listed in Shenzhen, last week raised $4.6 billion in Hong Kong, which was the largest listing in the city since Midea Group raised the same amount last year. CATL’s Shenzhen stock was down about 0.5% on Tuesday.
CATL’s deal means $7.73 billion has been raised in Hong Kong through initial public offerings and second listings so far in 2025, compared to $1.05 billion at the same time last year, according to LSEG data.
Bonnie Chan, CEO of bourse operator Hong Kong Exchanges and Clearing, said more than 40 firms listed in mainland China, known as A-share companies, were actively exploring Hong Kong listings.
"One major advantage for these companies to pursue a listing in Hong Kong is the fact that would open up an offshore fundraising platform for us to support their offshore expansion plan," Chan said at CATL’s listing ceremony at the stock exchange.
Wang Shuguang, a member of China International Capital Corp’s (CICC) management committee who oversees investment banking, said CATL’s listing could help revive Hong Kong’s capital markets. CICC was a sponsor of the CATL listing alongside JPMorgan, Bank of America and China Securities International.
"This is a further demonstration that domestically-listed leading industrial companies can be well-recognised by global investors in the Hong Kong offerings. This will also help the Hong Kong market become more active," he said.
The institutional tranche of the Hong Kong deal was oversubscribed 15.2 times, according to CATL’s filings, while the retail portion was 151 times oversubscribed.
The company said most of the funds would be used for construction of a factory in Hungary, part of its plan to make batteries in Europe for automakers such as BMW (ETR: BMWG ), Stellantis (NYSE: STLA ) and Volkswagen (ETR: VOWG_p ).
"This listing means our wider integration into the global capital market and a new starting point for us to promote the global zero-carbon economy," CATL Founder and Chairman Robin Zeng said at the listing ceremony.
CATL had aimed to raise about $4 billion in the listing but increased the size of the deal following the strong demand from investors.
A so-called "green shoe option" can be exercised that would take the size of CATL’s raising to $5.3 billion.
At that size, it would be the largest listing in Hong Kong since Kuaishou Technology raised $6.2 billion in 2021, according to LSEG data.
TRADE TRUCE MOMENTUM
CATL’s bookbuild had been open for a day when the U.S. and China announced a brief truce in the trade war that had roiled global financial markets since early April.
The move created some extra momentum for CATL, whose bookbuild had been already covered with pre-commitment orders when the deal launched last Monday, according to two sources with direct knowledge of the bookbuilding process.
The tariffs pause prompted some global long-only investors who had previously not bid for CATL stock in the Hong Kong listing to place orders, they added.
CATL did not respond to a request for comment.
The company has been extending its lead in the electric vehicle battery market with a 38% share globally in 2024. That increased from 36% a year ago, according to data from SNE Research.
The demand for CATL shares was driven by an increasingly positive sentiment towards China from global investors that had started to emerge since the start of the year despite the tariff war, according to the sources.
They said a decision to restrict U.S. onshore investors from buying CATL stock did not dent the demand for the shares.
U.S. investors with offshore accounts could still participate and some did so despite CATL being placed on a U.S. Department of Defense list in January of companies accused of working with the Chinese military.
CATL said in its Hong Kong listing documents it was working with U.S. authorities to have the "false designation" removed.