World’s Largest Battery Maker Seeks $2 Billion In IPO, But Will Raise Only $850 Million?

MAY 29 2018 BY MARK KANE 9

Contemporary Amperex Technology Ltd. (CATL), one of the biggest manufacturers of lithium-ion batteries for vehicles, would like to raise 13.1 billion yuan ($2 billion) by selling a 10% stake, at a valuation of about $20 billion.

However, according to Bloomberg, after profitability weakened, the company is valuated at just $8.5 billion and the 10% of shares (at 25.14 yuan each) would translate to only 5.46 billion yuan ($853 million).

CATL Global Deployment

“CATL’s expectations for IPO proceeds are also cut by more than half to 5.46 billion yuan ($853 million), leaving the company seeking other sources to fully fund its aggressive expansion in China and beyond, including in Europe. The growth plans and China’s reduced subsidies for the electric-vehicle industry are weighing on profitability, leaving investors awaiting a recovery in the company’s margins when EV demand accelerates down the road.”

Read Also – NIO Is Pursuing Up To $2 Billion For U.S. IPO

The IPO of CATL is just around the corner:

“The company starts accepting subscriptions from investors Wednesday. Once the IPO is completed, the stock is set to start trading on the ChiNext board of Shenzhen Stock Exchange, also known as the Chinese version of Nasdaq because it features innovative, small and mid-sized companies.”

The proceeds from the IPO will be utilized to expand production capacity above the competitors. Currently, the company operates at capacity of 7.5 GWh, and an extra 10 GWh annually is under construction. The next step planned is 24 GWh, which in total will give it 41.5 GWh.

It is expected that if CATL needs $2 billion, it will be able to secure the funds in other ways.

Source: Bloomberg

Categories: Battery Tech, China

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9 Comments on "World’s Largest Battery Maker Seeks $2 Billion In IPO, But Will Raise Only $850 Million?"

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pjwood1

Even 17GWh is about half the transport market (last year). But have they got that 8.1.1, high nickel, low cobalt goodness?

carcus

CATL supplies a lot of batteries for the Chinese market, whose EVs are subsidized by a crazy amount (like 2/3??) …… how long can that last?

Seems like the risk factor could be pretty high ,… like a flying pig in a typhoon or something.

Mark.ca

It will last until the battery prices come down or the air cleans by itself. Which will it be? The suspense is killing me!

carcus

That’s too much suspense. I’ll keep you from piddling …. the day away. … Dec 31, 2020. That’s when the typhoon stops blowing.

Pushmi-Pullyu

Is it normal for a company to do an IPO with only 10% of the company’s value? Seems strange to me, but then I’m not a stock investor, so perhaps this isn’t as unusual as I think.

Seems like there wouldn’t be much incentive to attract long-term investors. People who want to invest a lot in a company often want to be able to have some say in how the company is run, by voting at stockholder meetings. But if all the publicly owned shares add up to only 10% of the company’s value, then stockholders would have very little if any influence on how the company is being run.

Carcus

“It will be able to secure funds in other ways”

…. meaning China is hell bent on being the world leader in electric transportation???

(1600 new coal plants can’t be wrong)

carcus

kinda like in all those horror movies, (at least the good ones) .. where the “devil’s seed” — smithereened and assumed dead, — slithers off stage left …. /jarring chord, fade to yellow

Mikael

You forgot the /s for the 1600 plants. That ignorant statement has been debunked over and over again.

SJC

Sounds like the days where Chinese companies got everything they wanted is over.