The wave of "A+H" listings is surging, and CATL plans to secondary list in Hong Kong.

On December 26, Contemporary Amperex Technology Co., Limited (300750.SZ) announced that, to further advance the company’s global strategic layout, 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.

Contemporary Amperex Technology disclosed that on December 26, the company held the first meeting of the fourth session of the Board of Directors and the first meeting of the fourth session of the Supervisory Committee, during which the relevant resolutions regarding the proposed issuance of H shares and listing on the Hong Kong Stock Exchange were approved.

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

Regarding the timing for listing in Hong Kong, Contemporary Amperex Technology said it will fully consider the interests of existing shareholders and the conditions of domestic and international capital markets, and within the validity period of the shareholder meeting resolutions (i.e., 18 months from the date the resolution is approved at the company’s general meeting or other periods approved for extension), will select an appropriate time and issuance window to complete this issuance and listing.

The announcement also indicates that this issuance and listing still require submission to a shareholders’ meeting for review, and approval from relevant authorities including the China Securities Regulatory Commission (CSRC), the Hong Kong Stock Exchange, and the Securities and Futures Commission of Hong Kong. The specific details of the issuance have not yet been finalized, and whether the approval and filing will proceed smoothly remains highly uncertain.

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

It is worth noting that since the beginning of this year, the enthusiasm for “A+H” listings has been rising. Several industry leaders, including Junda Shares, Chifeng Gold, MGI Biological, Jiangbo Long, and Hutchmed (China), have planned to list on the Hong Kong Stock Exchange. Meanwhile, major companies such as Midea Group, SF Holding, and Longpan Technology have already successfully listed in Hong Kong.

Looking at the purpose of A-share companies seeking “A+H” listings, most are driven by considerations of global development. For example, about 45% of the funds raised from SF Holding’s Hong Kong IPO are allocated to strengthening the company’s international and cross-border logistics capabilities.

Chifeng Gold announced on June 8 that its plan to list in Hong Kong is to meet business development needs, further improve corporate governance and core competitiveness, and deeply promote its global strategy.

Leading domestic pharmaceutical company Hutchmed (China) stated that its plan to list in Hong Kong is mainly to further promote its “dual-wheel” strategy of technological innovation and internationalization, and to better support the development of its international business.

In addition to the company’s own 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 document on optimizing the pricing of initial public offerings and public market regulations, which includes proposals to lower the minimum H-share issuance threshold for A+H share issuers listing in Hong Kong.

Huachuang Securities’ research report pointed out that “by 2025, A-share companies’ listings in Hong Kong may heat up.” It is expected that lowering the threshold could enhance the willingness of potential issuers to list in Hong Kong. Furthermore, driven by their internationalization needs, companies are attracted to listing in Hong Kong to access international capital and expand their business.

Editor / Li Lu