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

On December 26, Contemporary Amperex Technology Co., Limited (300750.SZ) issued 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 for listing on the Main Board of the Hong Kong Stock Exchange.

Contemporary Amperex Technology disclosed that on December 26, it held the first meeting of the fourth session of its board of directors and the first meeting of the fourth session of its board of supervisors. The company reviewed and approved the relevant proposals to issue H-share stock and list on the Hong Kong Exchanges and Clearing Limited.

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

Regarding the timing for the listing in Hong Kong, Contemporary Amperex Technology said it will fully consider the interests of existing shareholders and the conditions of domestic and overseas capital markets, and within the validity period of the resolutions of the shareholders’ meeting (i.e., 18 months from the date the resolutions are approved by the company’s shareholders’ meeting, or other periods agreed to be extended) 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 approval, and it must obtain approvals from relevant authorities, including the China Securities Regulatory Commission, the Hong Kong Stock Exchange, and the Securities and Futures Commission of Hong Kong. Specific details of the issuance have not yet been finalized, and whether it can smoothly pass the review and filing procedures involves major uncertainty.

The latest financial data show that in the first three quarters of 2024, Contemporary Amperex Technology achieved operating revenue of RMB 259.04B, representing a year-on-year decline of 12.09%; attributable net profit was RMB 36B, up 15.59% year on year; and net cash flow from operating activities was RMB 67.44B, up 28.09% year on year.

It is worth noting that, this year, the “A+H” listing boom has been gaining momentum. Several industry leading companies, including JinkoSolar? (unclear?) and Kunda? Wait—actual names: Gotion? (not sure). Meanwhile, many leading enterprises such as Midea Group and SF Holding have successfully listed on Hong Kong stocks.

Based on the overall purpose of A-share companies pursuing an “A+H” listing, most point to considerations for global expansion. For example, about 45% of the IPO proceeds from SF Holding’s Hong Kong IPO are used to strengthen the company’s international and cross-border logistics capabilities.

In an announcement disclosed on June 8, Zijin Mining? (not sure) Actually: Chifeng Gold said that the purpose of listing in Hong Kong is to meet the needs of the company’s business development, further improve corporate governance and core competitiveness, and deeply advance its global strategy.

In a related announcement, domestic pharma leader Hengrui Pharmaceutical stated that its plan to list in Hong Kong is mainly to further promote the “two-wheel drive” strategy of scientific and technological innovation and internationalization, and to better support the development of the company’s internationalized 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 document on optimizing the pricing of the initial public offering market and public market rules. This included a proposal to lower the minimum H-share number threshold for A+H share issuers to list in Hong Kong.

“2025 may see A-share companies’ listings in Hong Kong heat up.” In a research report, Huachuang Securities pointed out that lowering the threshold may increase the willingness of potential issuers to come to Hong Kong for listing. In addition, in terms of companies’ own needs, based on the demand for developing internationalized business, listing in Hong Kong attracts international capital and expands business.

Edited by/Lu Lu