World’s biggest battery maker CATL to raise $5bn

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CATL has announced a sale of additional shares worth $5bn in Hong Kong, as the Chinese battery maker takes advantage of a surge in foreign investor interest in renewable energy stocks since the outbreak of war in Iran.

The world’s largest manufacturer of electric vehicle batteries said on Tuesday it would sell an additional 62.4mn shares for HK$626.92 (US$80) each, a roughly 10 per cent discount to the average closing price over the previous five trading days.

CATL’s stock price has surged 40 per cent since the US and Israel attacked Iran at the end of February, as investors bet a global oil shock will hasten demand for EVs and renewable energy.

“It’s very opportunistic,” said Brian Ho, an equity research analyst at Bernstein. “There’s very high appetite for CATL on the energy storage and electricity thematic. I think that’s why they’re issuing it right now.”

The follow-on placement would increase the number of CATL shares in Hong Kong by 40 per cent. The company’s Hong Kong-listed shares fell 6.9 per cent on Tuesday, while its mainland shares declined 1.7 per cent.

CATL has been listed in Shenzhen since 2018 but added a Hong Kong listing last year that raised more than $5bn in the world’s second-biggest share sale of 2025.

Still, its Hong Kong pool is a small fraction of the company’s overall float. Before Tuesday’s announcement, it accounted for 3.7 per cent of CATL’s listed shares.

Heightened investor demand for renewable energy stocks and the small number of Hong Kong shares available means CATL is one of the few Chinese companies in which its so-called H shares trade at a premium to its mainland counterparts, or A shares.

While many foreign institutional investors with mandates to own mainland Chinese stocks have chosen to own CATL’s A shares because they are cheaper, other global investors are either reluctant or unable to own large amounts of shares in a company listed in mainland China.

“For a lot of global investors they still prefer the H shares if they can buy more of that rather than the A,” said Ho. “That’s why it warrants a premium.”

For CATL, it made sense to issue more H shares to take advantage of that premium, Ho added. “Those funds that they get are global capital that they can use overseas. For both sides it’s a win-win.”

CATL is free to deploy funds raised in Hong Kong globally, while money raised in the mainland is subject to China’s strict capital controls.

The company has built battery plants in Hungary and Germany and is working with Stellantis on a new factory in Spain.

CATL said on Tuesday that proceeds from the follow-on offering would be used for research and development and the “construction of global new energy projects”.

But Horace Tse, an analyst at CLSA, said there were questions about why CATL was raising the additional funds and how the company would spend it, “given that they have cash on hand”.