On the evening of February 11, 2023, CATL (Contemporary Amperex Technology Co., Limited), widely recognized as the leader in the lithium battery sector in China, officially submitted its application for issuing overseas listed foreign shares (H-shares) and for listing on the main board of the Hong Kong Stock ExchangeThe application materials were published simultaneously on the exchange's website, marking a significant milestone for the company.

This upcoming IPO represents a strategic move for the company, as the funds raised will primarily focus on expanding production capacity overseas, advancing international business initiatives, and bolstering operational liquidity abroad, thus supporting CATL's long-term international strategyThe company has engaged several prestigious institutions such as Bank of America, CICC, JPMorgan, and Goldman Sachs as its underwriters for this endeavor.

Notably, however, the application documents did not disclose the specific amount of capital expected to be raised through this H-share listingNevertheless, preliminary reports from various international media suggest that CATL's IPO in Hong Kong could potentially raise at least $5 billion, approximately equivalent to RMB 36.4 billion.

Should CATL successfully get listed on the Hong Kong Stock Exchange, it would become the first lithium battery company to be publicly traded on both the A-share and H-share markets

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This event also has the potential to emerge as the largest IPO on the Hong Kong market in recent years.

According to the data disclosed in CATL's IPO application, the company has consistently maintained an upward trajectory in both income and profitability over recent years, alongside a robust cash flow situation.

Regarding revenue growth, CATL achieved an operating income of RMB 328.6 billion in 2022, which surged to RMB 400.9 billion in 2023—a year-on-year increase of 22%. Furthermore, by September 30, 2024, the company's revenue for the first nine months had reached RMB 259 billion.

As for profitability, CATL reported a net profit of RMB 33.5 billion in 2022, which climbed to RMB 47.3 billion in 2023, reflecting a year-on-year growth of 41.5%. The net profit for the first nine months of 2024 reached RMB 38.8 billion, representing a 19.2% increase compared to the same period last yearThe corresponding net profit margins for these years stood at 10.2% (2022), 11.8% (2023), and 15.0% (in the first three quarters of 2024).

In terms of return on equity (ROE), CATL maintained a steady ROE of 24.7% in both 2022 and 2023; however, by September 30, 2024, this figure has dropped to 22.1%.

The company's operating cash flow has exhibited stable growth, with net cash from operating activities recorded at RMB 61.2 billion in 2022, increasing to RMB 92.8 billion in 2023, and reaching RMB 67.4 billion in the first three quarters of 2024.

Research and development (R&D) expenditures are also noteworthy; CATL invested RMB 15.51 billion in R&D in 2022, accounting for 4.7% of its operating revenue, increasing to RMB 18.36 billion in 2023, or 4.6% of total revenue

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By the end of September 2024, R&D expenditure was recorded at RMB 13.07 billion, representing 5.0% of revenue.

According to the application materials, CATL's operations currently encompass a wide array of fields including power battery systems, energy storage systems, battery materials, and recyclingBy the end of the first three quarters of 2024, the income from power battery systems stood at RMB 17.55 billion, representing 67.8% of total income; income from energy storage systems was RMB 4.64 billion, amounting to 17.9%; and revenue from battery materials and recycling reached RMB 1.88 billion, which accounted for 7.3%.

In terms of overseas market expansion, by September 30, 2024, CATL had established 13 battery production bases globally, spanning multiple countries and regions such as China, Germany, and HungaryThe proportion of revenue derived from overseas markets has also been increasing year by year, rising from 23.4% in 2022 to 32.7% in 2023, and maintaining a share of 30.9% in the first three quarters of 2024.

As the overseas revenue share continues to grow, it becomes crucial for CATL to further advance its production capacity in international marketsThis need underpins the core objective of its Hong Kong IPO—to raise capital for the construction phases of its projects in Hungary.

According to publicly available information, the capacity project located in Hungary was approved by CATL's board and shareholders in 2022. This project plans to establish a production line with an annual capacity of 100 GWh of power battery systems at its Debrecen base, with a total investment expected not to exceed €7.34 billion (approximately RMB 55.5 billion) and an anticipated total construction cycle of no more than 64 months.

Currently, the Hungarian project has completed its preliminary preparations and construction has commenced.

Interestingly, as of December 31, 2024, of the €7 billion total investment expected over the five-year construction period, CATL has only invested approximately €700 million (about RMB 5.3 billion).

Moreover, based on CATL's third-quarter report, by the end of the third quarter of 2024, the company had a cash and cash equivalents balance of ¥234.95 billion.

As disclosed in CATL's annual performance forecast dated January 21, 2024, the company predicts that it will generate between RMB 356 billion and RMB 366 billion in operating income for the year, indicating a decrease of 11.2% to 8.71% year-on-year

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The decline is attributed to falling prices of raw materials like lithium carbonate, leading to corresponding adjustments in product prices that ultimately impact overall revenue negatively.

According to the 'China Lithium-Ion Battery Industry Development White Paper (2025)' published by reputable research institutions, including EVTank and the China Battery Industry Research Institute, the global lithium battery shipment volume is expected to reach 1545.1 GWh in 2024, reflecting a year-on-year growth of 28.5%. Among these, shipments of automotive power batteries are anticipated to hit 1051.2 GWh, marking a 21.5% increase, while energy storage battery shipments are projected to surge to 369.8 GWh, a remarkable 64.9% year-on-year growth.

Further, data from the China Automotive Power Battery Industry Innovation Alliance indicates that from January to December 2024, China’s total production of power and other batteries reached 1096.8 GWh, showing a year-on-year growth of 41.0%.

According to statistics from the High-Tech Industry Research Institute (GGII), in 2024, China’s electric vehicle sales peaked at 11.35 million units, reflecting a 49.7% increase, while the installed capacity of power batteries was around 531 GWh.

As one of the crucial upstream raw materials for the lithium battery industry, lithium carbonate also saw its price reach a new low in 2024.

Data from Xinluo Lithium Battery indicates that the average annual price of technical-grade lithium carbonate in 2024 was approximately ¥91,000 per ton, a staggering 65% drop from 2023. Closer inspection reveals that the price per ton started at ¥101,000 at the beginning of 2024 and fell to ¥75,000 by the end of the year, marking a decline of 25.74%, with the peak price hitherto reaching ¥116,000.

A report released by Southwest Securities in January 2025 indicated that lithium battery prices had stabilized, decreasing from about ¥0.45 per Wh at the start of 2024 to approximately ¥0.4 per Wh currently.

A well-known research institution within the lithium battery industry, Gaogong Lithium Battery, published an article on February 5, 2025, stating that 2024 represented a year of deep price stabilization for materials and cells, as well as a year of restoring ecological balance within the industry

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