China’s Contemporary Amperex Technology Limited ( CATL ), the world’s largest battery manufacturer, which is currently listed on the Shenzhen Exchange, aims to raise via a secondary listing on the Hong Kong Stock Exchange, according to its prospectus, over HK$31 billion ( US$3.99 billion ) of equity from overseas investors to support its construction of a large-scale electric vehicle ( EV ) battery factory in Hungary.

The initial public offering ( IPO ), which is scheduled to go public on May 20, is set to be the largest IPO deal in Hong Kong and the world year to date and showcase the ability of Chinese companies to expand overseas despite the current economic tensions between China and US.

CATL, according to the prospectus, plans to issue 117,894,500 H-shares at a maximum of HK$263 per share in this listing to hit the HK$31 billion mark. The deal is also structured with an overallotment option, which, if exercised, would allow it to upscale the size of the fundraising to HK$40.6 billion. Around 65.7% of the offering is subscribed by a consortium of 23 cornerstone investors, including Sinopac HK and Kuwait Investment Authority, which have agreed to hold their shares for at least six months.

As well, 90% of the proceeds raised from the offering ( approximately HK$27.6 billion ), the prospectus notes, will be used for advancing the construction of a 1.05-million-square-metre-sized battery production facility ( equivalent to about 140 football fields ) located in Debrecen, Hungary, which will be completed in two phases and add a total of 72 gigawatt-hour ( GWh ) battery manufacturing capacity upon operation.

CATL has already deployed €700 million ( US$787 million ) in 2024 to support phase I of the Hungarian project, as reflected in its 2024 annual report; and phase 2, the construction of the project, is expected to commence in 2025.

As the world’s largest battery manufacturer, CATL accounts for 37.9% of the global EV battery market and 37% of the global energy storage system ( ESS ) battery market in 2024, according to SNE research, a Korea-based consultancy specializing in the battery market.

The substantial increase of EVs globally and the growth of investments in renewable energy infrastructures worldwide are driving the demand for EV and ESS batteries, which is conducive to the business growth for CATL and other battery manufacturers over the years. The strong momentum of CATL’s battery shipment overseas also makes it a target for various trade restrictions from the European Union, the largest destination for China’s EV exports.

To circumvent export restrictions and penetrate local markets, CATL began to redeploy its supply chain globally by localizing battery production in Europe years ago. In 2018, it started to build its first overseas battery manufacturing facility in Thuringia, Germany. The 529,000-square-metre facility with a 14GWh annual capacity started operations in 2022.

In addition, CATL is actively preparing and advancing its joint venture factory with Stellantis in Spain, and another battery value chain project in Indonesia is progressing. These projects, including the ongoing one in Hungary, are expected to strengthen the company’s overseas presence and bolster its supply-chain resilience amid the economic uncertainty and geopolitical tensions in play among China, the US and Europe.

The stock price for CATL on Shenzhen Exchange on May 12 rose by 3.52%, ending the day at 257 yuan ( US$35.50 ) per share, which is roughly on par with its Hong Kong IPO price.