New Stock Offering | "King Ning" is here! "Lithium Battery Giant" Contemporary Amperex Technology has started its initial public offering! It is proposed to be listed on May 20, with a subscription amount of 26,565.24 HKD per lot.

Futu News reported on May 12, $CATL (03750.HK)$ announced that it will conduct an IPO from May 12 to May 15, with the company planning to globally offer approximately 0.118 billion shares, expected to be listed on May 20.

Company Overview

Contemporary Amperex Technology is a global leader in new energy innovative technology, mainly engaged in the R&D, production, and sales of power batteries and energy storage batteries, aimed at promoting the replacement of mobile fossil energy and stationary fossil energy, while achieving integrated innovation in market applications through electrification and intelligence.

As of December 31, 2024, Contemporary Amperex Technology has established six major R&D centers and thirteen battery production manufacturing bases worldwide, with service points covering 64 countries and regions. Contemporary Amperex Technology serves the most extensive range of customers and end users globally, having achieved a cumulative installation of over 17 million power batteries in vehicles by December 31, 2024, with one out of every three Electric Vehicles worldwide equipped with Contemporary Amperex Technology batteries, and more than 1,700 projects applying energy storage batteries globally. The automotive clients of Contemporary Amperex Technology include brands like Mercedes-Benz, BMW, Toyota, Honda, NIO, Li Auto, Xiaomi, and others; energy storage clients include NextEra, Synergy, State Power Investment Corporation, and others. As of December 31, 2024, Contemporary Amperex Technology has set up over 770 after-sales service stations globally, including 169 overseas service stations, continuously providing high-quality services to customers worldwide.

Financial Overview

According to the annual report disclosed by Contemporary Amperex Technology, the company achieved a revenue of 362.013 billion yuan in 2024. During the reporting period, the company sold 475 GWh of lithium-ion batteries, a year-on-year increase of 21.79%, of which the sales of power battery systems reached 381 GWh, a year-on-year increase of 18.85%; the sales of energy storage battery systems reached 93 GWh, a year-on-year increase of 34.32%.

As of December 31 for the years 2022, 2023, and 2024, the company's gross profits were 57.964 billion yuan, 76.935 billion yuan, and 88.494 billion yuan respectively.

Source: Prospectus.

Industry Overview

Power batteries are rechargeable batteries that provide energy for power systems. Depending on the different Cathode Materials, power batteries can be divided into ternary batteries, lithium iron phosphate batteries, and so on. According to a report by Gaogong Industry Research, the market share of ternary batteries and lithium iron phosphate batteries accounted for over 99% of the global power battery shipments in 2024, making them the most mainstream power battery products. Ternary Cathode Materials theoretically have a higher specific capacity limit, allowing for higher energy density, high charge-discharge efficiency, and broad temperature adaptability; lithium iron phosphate batteries theoretically have better thermal stability and longer cycle life. In addition, the industry continues to conduct research and technological innovation, achieving technological breakthroughs in Sodium-ion Batteries, solid-state batteries, and expanding application scenarios.

Electric Vehicles are the primary application of Global power batteries, which can be divided into New energy Passenger Vehicles and New energy Commercial Vehicles based on their use. The widespread application of Electric Vehicles contributes to the green and low-carbon development of the transportation industry. Furthermore, Electric Vehicles have comprehensively enhanced the user experience in terms of power and intelligence. The penetration rate of Electric Vehicles is continuously increasing, driving the growth of Global power battery shipments. Currently, New energy Passenger Vehicles mainly use ternary batteries and lithium iron phosphate batteries, while New energy Commercial Vehicles primarily use lithium iron phosphate batteries.

The sales of Electric Vehicles are increasing, driving the continuous growth of Global Battery shipments, which are expected to maintain an upward trend. Global Battery shipments have grown from 182 GWh in 2020 to 969 GWh in 2024, with a compound annual growth rate of 51.8%, and are expected to reach 3,754 GWh by 2030, with a compound annual growth rate of 25.3% from 2024 to 2030.

Cornerstone Investor

Cornerstone investors have agreed to subscribe or cause their designated entities to subscribe for the relevant number of shares available for purchase at the offering price under several conditional limitations, with a total amount of approximately $2.628 billion (or about HKD 20.371 billion). Cornerstone investors include:

Sinopec (Hong Kong) Co., Ltd. ("Sinopec (Hong Kong)"), Kuwait Investment Authority ("KIA"), HHLR CF. L.P., Shanghai Gao Yi, and CICC Financial Trading Limited (for Gao Yi's over-the-counter swaps), Perseverance Asset Management International (Singapore) Pte. Ltd. ("Perseverance Asset Management"), Zenith Hop International Limited ("Zenith Hop"), Abstract Enigma Limited (a holding subsidiary of Boyu Capital Opportunities Master Fund), Shanghai Jinglin and CICC Financial Trading Limited (for Jinglin's over-the-counter swaps), Jinglin Asset Management Hong Kong Limited ("Hong Kong Jinglin"), Pinpoint Asset Management Limited ("Pinpoint"), UBS Asset Management (Singapore) Ltd. ("UBS AM Singapore"), WT Asset Management Limited ("WT"), CPE Redwood Investment Limited ("CPE Investment"), Oaktree Capital Management, L.P. ("Oaktree"), MX Bright Charm (BVI) Limited ("MX Bright"), Mirae Asset Securities Co., Ltd ("Mirae Securities") and Mirae Asset Global Investments Co., Ltd. ("Mirae Asset", collectively referred to as "Mirae Investors"), RBC Global Asset Management (Asia) Limited, The Pacific Asset Management Limited Liability Company ("The Pacific Asset Management") and China Pacific Insurance Asset Management (Hong Kong) Co., Ltd. ("China Pacific Insurance (Hong Kong)", collectively referred to as "China Pacific Investors"), LMR Multi-Strategy Master Fund Limited ("LMR Master Fund"), Luoyang Kweichow Group Co., Ltd. ("Luoyang Kweichow Group"), China Post Financial Management Co., Ltd. ("China Post Financial Management"), Taikang Life Insurance Co., Ltd. ("Taikang Life Insurance"), and Lingotto Innovation Master Fund ("Lingotto").

Source: Prospectus.

Use of funds

In terms of fundraising purposes, Contemporary Amperex Technology expects to net approximately 30.718 billion Hong Kong dollars from the global offering (based on an issue price of 263 Hong Kong dollars). According to the prospectus, Contemporary Amperex Technology intends to use the funds raised from the global offering for the following purposes:

Approximately 90% or 27.646 billion Hong Kong dollars will be used to advance the first and second phases of the Hungary project; and about 10% or 3.072 billion Hong Kong dollars will be used for working capital and other general corporate purposes.

The Hungary project is located in Debrecen, Hungary, with a total land area of 1.05 million square meters for the first and second phases, planned production capacities of 34GWh and 38GWh (totaling 72GWh). The Hungary project can be used to produce power batteries and energy storage batteries, supplying to European automakers and other overseas clients. Currently, the project has completed the preliminary preparations and has begun construction. As of December 31, 2024, the company has invested approximately 0.7 billion euros. The total investment for the first and second phases of the Hungary project is approximately 4.9 billion euros, and the remaining funds will be invested in the future to complete the construction as planned.

More reading:Contemporary Amperex Technology Prospectus

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Editor/Afina

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