In the capital markets arena, it has been a while since we witnessed a spectacle of such magnitudeOn the evening of February 11, Contemporary Amperex Technology Co., Limited (CATL), a prominent battery manufacturer, submitted its IPO prospectus to the Hong Kong Stock ExchangeAccording to the details laid out in the prospectus, seven major investment banks—including China International Capital Corporation, Goldman Sachs, Morgan Stanley, and UBS—are involved in underwriting this significant public offeringAnalysts speculate that CATL's fundraising efforts could surpass a staggering $5 billion, positioning it to achieve the largest IPO in Hong Kong's stock market over the past three years.

This strategic timing of the IPO aligns favorably with the rising capital enthusiasm fueled by DeepSeek's recent capital infusion, which has led investors to reevaluate Chinese tech assetsAs a reflection of this renewed investor confidence, the Hang Seng Index has experienced an impressive rise of 6.16% year-to-date, reaching a three-month high, while the Hang Seng Tech Index has surged by 15.09% in the same timeframe.

Li Zhenguo, head of UBS's Global Investment Banking division, expressed optimism regarding the Hong Kong IPO market this year, predicting that total fundraising would exceed HKD 100 billionFrom an industry perspective, companies with robust cash flows and stable growth trajectories—including those in consumer and industrial technology sectors—are expected to attract considerable investor interest, demonstrating lively market performance.

CATL's financial performance further complements this positive outlookThe company recently issued a profit forecast for 2024, projecting a net profit attributable to shareholders between RMB 49 billion and RMB 53 billion, representing a year-on-year growth of 11.1% to 20.1%. Additionally, CATL announced a special dividend plan for 2024, amounting to approximately RMB 5.397 billion, showcasing its commitment to returning value to shareholders.

Market expectations from various brokerages indicate that CATL's production capacity utilization is expected to approach 90% in the fourth quarter of 2024. They foresee the introduction of more than 10 GWh of new products, contributing to enhanced profits in the first quarter of 2025. Dongwu Securities projects a substantial growth in shipment volume for CATL, estimating a year-on-year increase of 35% in 2025, reaching around 650 GWh

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Such growth forecasts maintain CATL's trajectory of impressive financial expansion.

This buoyant environment has led to fierce competition among investment banks vying for underwriting roles in this IPO, despite the relatively modest underwriting fees associated with the dealEach bank is eager to participate in the opportunity presented by CATL's public listing, particularly given the company's stature as the world's largest lithium battery manufacturer.

Through this listing in Hong Kong, CATL aims to secure funding for overseas capacity expansion, international business development, and working capital supplementationThis capital influx is essential to underwrite its long-term internationalization strategyCATL has articulated its intentions to utilize the proceeds from the IPO to bolster its foreign exchange reserves, providing ample resources for international projectsFurthermore, tapping into an international capital platform will enhance cross-border resource integration capabilities, further optimizing global resource allocation and boosting operational efficiency and profitability.

Examining CATL's financial metrics reveals that, in the first three quarters of the previous year, nearly 30% of the company's revenue stemmed from international marketsThis growing percentage emphasizes CATL's ongoing commitment to establishing battery production facilities abroad to satisfy the local supply needs of international automotive manufacturers.

Currently, CATL boasts a global presence with 13 major manufacturing bases, collectively equipped with a production capacity of over 700 GWhThe company has forged deep-rooted partnerships with leading automotive enterprises, such as BMW and Volkswagen, as well as energy conglomerates, enhancing its status in the global supply chainBy 2024, CATL's cumulative battery deliveries are projected to surpass a phenomenal 1 TWh.

In December of last year, CATL made headlines by announcing a joint venture with Stellantis to establish a power battery factory in Spain—marking its third such production facility within Europe

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This strategic move highlights CATL's commitment to expanding its footprint in key markets.

Recently, Pan Jian, co-chairman of CATL, indicated that new joint ventures with other major automotive manufacturers in Europe are anticipated to be unveiled this year, demonstrating the company's proactive approach in nurturing collaborative relationships within the industry.

Ford Motor Company's CEO Jim Farley has articulated the necessity for Ford to leverage Chinese battery technology to remain competitive against its Chinese counterparts in the automotive realmFord's battery campus in the United States is wholly owned by the company, while CATL provides crucial technical support and operational services, effectively bridging the technological gap between the two giants.

By establishing a presence in Hong Kong, CATL will forge closer ties with institutional and strategic investors, propelling shareholder structure diversificationThis strategic move further integrates CATL into the global market, thereby attracting potential overseas clients and partners, and positioning the company as a significant player on the world stageThe implications of CATL's IPO in Hong Kong are monumental, marking a critical milestone in its journey toward global expansion.

When CATL commenced trading on the A-share market in 2018, its market capitalization at the end of the first trading day stood at approximately RMB 78.6 billionFast forward seven years, and CATL's market value exceeds RMB 1 trillion, solidifying its pivotal role within the global new energy vehicle supply chainThis remarkable growth story epitomizes the wealth creation potential associated with the industry while simultaneously driving continuous technological upgrades and structural evolution.

CATL has adeptly transitioned from merely a power battery manufacturer into exploring diverse opportunities across various segmentsBesides power batteries, CATL's energy storage batteries have attained the number one position in terms of global shipments for three consecutive years, now constituting one of its core business operations

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