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

On December 26, CATL (300750.SZ) announced that to further promote the company’s globalization strategy, create an international capital operation platform, and enhance comprehensive 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 it held the first meeting of the fourth board of directors and the first meeting of the fourth board of supervisors on December 26, where it reviewed and approved the relevant proposals for the company’s planned issuance of H shares and listing on the Hong Kong Stock Exchange.

The proposal states that the number of H shares issued this time will not exceed 5% of the total share capital of the company after this issuance (before the exercise of the over-allotment option), and grants the overall coordinator an over-allotment option of up to 15% of the aforementioned number of H shares issued.

Regarding the timing of the listing in Hong Kong, CATL stated that it will fully consider the interests of existing shareholders and the conditions of both domestic and foreign capital markets, choosing an appropriate timing and issuance window to complete this issuance and listing within the validity period of the shareholder meeting resolution (i.e., within 18 months from the date of approval by the company’s shareholder meeting or other agreed extended periods).

According to the announcement, this issuance and listing still need to be submitted for approval by the shareholder meeting and must obtain approval from relevant institutions such as the China Securities Regulatory Commission, the Hong Kong Stock Exchange, and the Hong Kong Securities and Futures Commission. Specific issuance details have not yet been finalized, and there are significant uncertainties regarding the approval and filing process.

The latest financial data shows that in the first three quarters of 2024, CATL achieved operating revenue of 259.045 billion yuan, a year-on-year decline of 12.09%; net profit attributable to shareholders was 36 billion yuan, a year-on-year increase of 15.59%; and net cash flow from operating activities was 67.444 billion yuan, a year-on-year increase of 28.09%.

It is worth mentioning that this year, the “A+H” listing trend has heated up. Several leading companies in the industry, including Junda Co., Chifeng Gold, Maiwei Bio, Jiangbolong, and Hengrui Medicine, are planning to list on the Hong Kong Stock Exchange, while top companies like Midea Group, SF Holding, and Longpan Technology have successfully landed on the Hong Kong stock market.

The objective of A-share companies seeking “A+H” listings mainly points to considerations of globalization development. For example, approximately 45% of the funds raised from SF Holding’s Hong Kong IPO will be used to enhance the company’s international and cross-border logistics capabilities.

Chifeng Gold stated in its announcement on June 8 that the listing in Hong Kong is to meet the needs of the company’s business development, further enhance corporate governance and core competitiveness, and deeply promote the company’s globalization strategy.

The domestic pharmaceutical leader Hengrui Medicine announced that it plans to list in Hong Kong primarily to further promote its dual-driven strategy of technological innovation and internationalization, further supporting the development of the company’s international business.

In addition to the companies’ 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 published a consultation document on optimizing the pricing of initial public offerings and public market regulations, which includes plans to lower the minimum number of H shares required for A+H issuers to list in Hong Kong.

“H-share listings by A-share companies may heat up in 2025,” pointed out Huachuang Securities in a research report, indicating that lowering thresholds is expected to enhance the willingness of potential issuers to list in Hong Kong. Additionally, from the perspective of corporate demand, the need for international business layout attracts international capital and expands business.

Editor/Li Lu