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

On December 26, CATL (300750.SZ) released an announcement stating that, to further advance the company’s global strategy, build an international capital operations platform, and enhance overall competitiveness, the company plans to issue overseas listed foreign-invested shares (H shares) and apply to have the shares listed on the Main Board of the Hong Kong Stock Exchange.

CATL disclosed that on December 26, it convened the first meeting of the Fourth Session of the Board of Directors and the first meeting of the Fourth Session of the Supervisory Board. The company reviewed and approved the relevant proposals for issuing H-share stock and listing on the Hong Kong Exchanges and Clearing Limited.

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

Regarding the timing for listing in Hong Kong, CATL said it will fully consider the interests of existing shareholders and the conditions of capital markets both in Mainland China and overseas. Within the effective period of the shareholders’ meeting resolutions (i.e., 18 months from the date on which the company’s shareholders’ meeting approves the matter, or any other period agreed to be extended), it will choose an appropriate time and issuance window to complete this issuance and listing.

Also according to the announcement, this issuance and listing still needs to be submitted to the shareholders’ meeting for review, and approvals must be obtained from relevant authorities, including the China Securities Regulatory Commission, the Hong Kong Stock Exchange, and the Securities and Futures Commission of Hong Kong. Specific issuance details have not yet been finalized, and whether the matter can be approved and filed smoothly remains a significant source of uncertainty.

Latest financial data show that in the first three quarters of 2024, CATL achieved operating revenue of RMB 259.045 billion, down 12.09% year over year; attributable net profit was RMB 36.001 billion, up 15.59% year over year; and net cash flows from operating activities were RMB 67.444 billion, up 28.09% year over year.

It is worth mentioning that the “A+H” listing momentum has been heating up since the beginning of this year. Several industry-leading companies, including Junda Shares, Chifeng Gold, Mawy Bio, JLC Electronics, and Innovent Biologics, have been planning to list on the Hong Kong Stock Exchange. Meanwhile, leading companies such as Midea Group, SF Holdings, and Longpan Technology have already successfully entered the Hong Kong stock market.

In terms of the purpose of Mainland A-share companies seeking “A+H” listings, most point to considerations related to global development. For example, about 45% of the IPO proceeds of SF Holdings’ Hong Kong listing are used to strengthen the company’s international and cross-border logistics capabilities.

In an announcement disclosed by Chifeng Gold on June 8, the company stated that listing in Hong Kong is to meet the needs of business development, further enhance the level of corporate governance and core competitiveness, and deeply advance its global strategy.

Domestic pharmaceutical leader Innovent Biologics stated that its plan to list in Hong Kong is mainly to further advance a strategy driven by both scientific and technological innovation and internationalization on a “dual-wheel” basis, and to further help develop the company’s international business.

In addition to companies’ own financing needs, policy support may also increase A-share companies’ willingness to list in Hong Kong. On December 19, the Hong Kong Stock Exchange issued a consultation paper on optimizing the pricing for the initial public offering market and related public market rules. The document includes a proposal to reduce the minimum H-share share threshold for A+H share issuers to list on the Hong Kong Exchange.

“Mainland A-share companies listing in Hong Kong may see a surge in 2025.” In a research report, Huachuang Securities noted that lowering the threshold is expected to increase potential issuers’ willingness to come to Hong Kong for listings. In addition, regarding companies’ own needs, driven by the need to lay out international business, listing in Hong Kong attracts international capital and expands business.

Editor / Li Lu