CATL share price surges 18% in Hong Kong debut amid world’s biggest IPO of 2025

Shares of Contemporary Amperex Technology Co. Ltd. (CATL), the world’s largest battery maker, surged over 18% in their trading debut on the Hong Kong stock exchange on Tuesday, showing strong investor confidence in the company’s global growth prospects amid a booming electric vehicle (EV) market.

CATL shares were last trading at 308 Hong Kong dollars, significantly higher than their initial public offering price of HK$263 per share.

The listing raised HK$35.7 billion ($4.6 billion), making it the largest global IPO of 2025 so far, according to a company filing.

The buoyant debut in Hong Kong came even as CATL’s shares on the Shenzhen stock exchange initially opened lower.

However, those shares later rebounded, closing 1.5% higher at 264 yuan.

Market analysts said the strong performance of the Hong Kong shares is likely to provide support to the company’s domestic valuation.

“For the H shares to be trading above the A shares just shows how exceptional the demand is for this company, particularly from global investors,” said Neil Beveridge, senior research analyst at Bernstein, speaking to CNBC.

“I think that as the H shares continue to perform strongly, that will pull up the A shares.”

Focus shifts to Europe amid slowing Chinese growth

CATL said in its filing that 90% of the IPO proceeds would be directed toward its planned manufacturing facility in Hungary.

The factory is expected to supply major European carmakers such as Stellantis, BMW, and Volkswagen in a strategic pivot towards international markets.

“Europe is an exceptionally important market for CATL,” Beveridge added.

“While growth in China is starting to level off due to high market penetration, Europe is still in early stages, with only 20-25% EV sales penetration. That leaves considerable room for expansion.”

This international push aligns with broader trends among leading Chinese EV companies like BYD, which are also seeking to expand abroad.

However, the path has not been without hurdles.

CATL’s global ambitions have faced pressure from geopolitical tensions, including trade restrictions imposed by the US and EU and its inclusion on a Pentagon watchlist earlier this year—allegations the company denies.

CATL a key company in global EV investment

Despite a 9.7% dip in annual revenue in 2024 due to intense domestic competition, CATL managed to post a 15% increase in net profit year over year.

EV sales in China surged to 11 million units last year, growing 40% from 2023, buoyed by state incentives and subsidies.

Brendan Ahern, chief investment officer at KraneShares, said CATL remains a cornerstone in global EV investment strategies.

“We’re a big believer and investor in CATL in our global EV strategy. It’s just phenomenal, it’s a ‘must own company,’ in my opinion, along with BYD for investors in the space,” Ahern said.

Bank of America, CICC, Goldman Sachs, Morgan Stanley, and JPMorgan Chase served as joint lead managers for the Hong Kong IPO.

Speaking on CNBC’s Squawk Box Asia, Andy Maynard of China Renaissance noted that CATL’s IPO underscores continued investor appetite for high-quality Chinese firms, even amid persistent trade tensions between Beijing and Washington.

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