The largest IPO in Hong Kong stock market this year may be coming! CATL Receives 21 Times Oversubscription, Lithium Battery Sector Heats Up

This week, CATL, a leading domestic lithium battery company, launched its Hong Kong IPO, heating up the lithium battery sector.

According to the latest announcement, the public offering portion of CATL's Hong Kong IPO was oversubscribed 21 times, with the financing subscription amount reaching HKD 51.7 billion. In this IPO, CATL also received support from numerous cornerstone investors, including Sinopec, the Kuwait Investment Authority, Hillhouse Capital, and Gaoyi Asset Management, forming a luxurious lineup.

According to the agreement, the cornerstone investors have agreed to subscribe, or cause their designated entities to subscribe, for the number of shares available for purchase at the offering price, subject to certain conditions, with a total amount of approximately USD 2.628 billion (or approximately HKD 20.371 billion). The market expects that CATL's issuance of H shares this time is also expected to become the largest IPO project in the Hong Kong stock market in terms of market size in 2025.

Driven by the popularity of CATL's Hong Kong IPO, the lithium battery sector in the Hong Kong stock market has also shown signs of heating up recently. Some individual stocks have outperformed the Hang Seng Index in terms of gains over the past five days, indicating signs of attention from short-term capital.

Considering that after Mixue Ice Cream & Tea's successful listing and subsequent bullish performance, the tea beverage concept in the Hong Kong stock market collectively surged. Therefore, based on the recent trends in the lithium battery sector, it is not ruled out that there may be speculative activities riding on the momentum of CATL's H-share listing. It is reported that CATL's H shares will officially list on the Hong Kong Stock Exchange on May 20.

It is worth mentioning that the current improvement in the prosperity of the domestic lithium battery industry may also catalyze the future market performance of lithium battery stocks.

In addition, following the joint statement issued by China and the US on the Geneva Economic and Trade Talks on May 12, some analysts have suggested that the expected easing of China-US tariffs may bring a turning point for the lithium battery industry's exports to the US.Data shows that the US is China's largest export market for lithium-ion batteries, with an export value of approximately USD 15.3 billion in 2024, accounting for 25% of the total export value.

Huatai Securities believes that in the long term, with the continuous launch of new car models and technologies in China, as well as the promising prospects of the energy storage market in Europe, Asia, Africa, and Latin America, it is optimistic about the continuous improvement in the supply-demand balance of the lithium battery industry chain. It recommends paying attention to leading companies in batteries, structural components, and anodes with a favorable market structure, as well as leading companies in lithium iron phosphate cathodes benefiting from high-pressure density upgrades.

Overall, based on the logic of improving marginal demand from downstream sectors and the industry chain prices being at the bottom region, the rebound in lithium battery stocks is also worth anticipating.