The "A+H" wave is rising, CATL plans to relist in Hong Kong

On December 26, CATL (300750.SZ) announced that to further advance the company’s globalization strategy, build an international capital operation platform, and enhance overall competitiveness, the company plans to issue overseas listed foreign shares (H-shares) and apply for listing on the Main Board of the Hong Kong Stock Exchange.

CATL disclosed that on December 26, it held the first meeting of the Fourth Board of Directors and the first meeting of the Fourth Supervisory Committee, during which the proposal to issue H-shares and list on the Hong Kong Stock Exchange was approved.

The proposal states that the number of H-shares issued this time will not exceed 5% of the company’s total share capital after the issuance (before the exercise of the over-allotment option), and an overall coordinator will be granted an over-allotment option of no more than 15% of the H-shares issued.

Regarding the timing for the Hong Kong listing, CATL said it will fully consider the interests of existing shareholders and the conditions of domestic and international capital markets, and will choose an appropriate time and issuance window within the validity period of the shareholders’ meeting resolution (i.e., 18 months from the date of approval by the company’s shareholders’ meeting or other extended periods).

Additionally, the announcement indicated that this issuance and listing still require approval from the shareholders’ meeting and must be approved by relevant authorities such as the China Securities Regulatory Commission, the Hong Kong Stock Exchange, and the Hong Kong Securities and Futures Commission. The specific details of the issuance have not yet been finalized, and there is significant uncertainty regarding whether the review and filing will proceed smoothly.

Latest financial data shows that in the first three quarters of 2024, CATL achieved operating revenue of 259.045 billion yuan, a decrease of 12.09% year-on-year; net profit attributable to shareholders was 36.001 billion yuan, up 15.59% year-on-year; and net cash flow from operating activities was 67.444 billion yuan, an increase of 28.09% year-on-year.

Notably, since the beginning of this year, the enthusiasm for “A+H” listings has increased. Industry leaders such as Junda Co., Chifeng Gold, Maiwei Biotech, Jiangbolong, and Hengrui Medicine are planning to list on the Hong Kong Stock Exchange. Companies like Midea Group, SF Holding, and Longpao Technology have already successfully listed in Hong Kong.

The main reason for many A-share companies seeking “A+H” listings is their consideration of globalization. For example, SF Holding’s Hong Kong IPO raised about 45% of its funds to strengthen its international and cross-border logistics capabilities.

Chifeng Gold announced on June 8 that its Hong Kong listing aims to meet business development needs, further improve corporate governance and core competitiveness, and deepen the company’s globalization strategy.

Leading domestic pharmaceutical company Hengrui Medicine announced that its plan to list in Hong Kong is mainly to promote technological innovation and the dual-driven strategy of internationalization, further supporting the development of its international business.

In addition to companies’ financing needs, policy support may also increase the willingness of A-share companies to list in Hong Kong. On December 19, the Hong Kong Stock Exchange issued a consultation paper on optimizing the market pricing and public market rules for initial public offerings, including plans to lower the minimum number of H-shares for A+H share issuers listing in Hong Kong.

“By 2025, A-share companies’ listings in Hong Kong may heat up,” said Huachuang Securities in a research report. The lowered thresholds are expected to boost potential issuers’ willingness to list in Hong Kong. Moreover, driven by internationalization needs, companies are attracted to Hong Kong listings to access international capital and expand their business.

Editor/Li Lu