Chinese battery-maker CATL surges on IPO: "Quite an impressive company"

CGTN Europe

CGTN Europe interviewed Fiona Cincotta, Analyst, City Index

Transcript

00:00Well, the CATL flotation catapulted Hong Kong back to the number one spot in global fundraising.

00:06It means its IPO market this year is already worth over 7.5 billion US dollars.

00:12That's a six-fold increase on last year.

00:16Hong Kong is now ahead of both the NASDAQ and the New York Stock Exchange for IPOs.

00:22And big business tends to attract even more business.

00:25By the end of April, more than 130 companies were in the pipeline for a Hong Kong listing.

00:31Let's talk to Fiona St. Cotter, the analyst at Citi Index.

00:35Fiona, welcome back.

00:36What's your take on CATL's debut in Hong Kong?

00:39Were you surprised by this jump in share price?

00:43Well, I think if we have a look at the broader market tone,

00:46there's obviously these lingering concerns regarding trade tensions between the US and China.

00:52Now, while they have been reduced, they obviously do still exist.

00:56So, that's one thing to take into account.

00:58But on the other side of this, if we look at this as an individual company,

01:02you know, it really is quite an impressive company.

01:06It's relatively new.

01:07It's a relatively young company.

01:09But it's still built a really strong clientele list,

01:13as we've heard with Tesla Prime, battery power for Tesla, Volkswagen,

01:18other big names like Ford, and, you know, dominating around 38% of the market.

01:23So, the fact that you look at what high-quality stock this is,

01:27then I think that does make the fact that we've seen this impressive demand less surprising.

01:32This was the largest IPO so far this year.

01:35What does that say about investor confidence in the electric vehicle sector?

01:40Because if you look at this from Europe or even the UK,

01:43there is this sort of stuttering enthusiasm for EV, but perhaps not everywhere.

01:51Yes, that's right.

01:52I mean, it really does send a very strong positive signal

01:55as far as demand for the right EV company is concerned.

01:59I mean, as far as EV sales are concerned globally,

02:03if we look at the data, they have increased EV cars.

02:07They've increased 25% from 2023 to 2024.

02:12Also, in 2024, one in five cars sold was an EV car.

02:16So, it does look like demand is still increasing at a strong rate.

02:20Obviously, there are globally government initiatives to support that growth

02:24as well as policies.

02:25And also, we're seeing ongoing technological advances

02:29which could boost this sector further.

02:31So, I think with the right company, showing with the right quality clients,

02:35this does seem a good sector and it is attracting that demand.

02:38What about Hong Kong?

02:39I mean, how important is Hong Kong as a financial platform,

02:43in particular for Chinese companies,

02:45especially given these trade tensions and tariff tensions with the United States?

02:51Yes, I think it's really proving to be a very important platform for Chinese firms.

02:59I mean, a lot of firms do list on mainland with A shares

03:03and that brings sort of liquidity, robust liquidity and higher valuations.

03:08But then this Hong Kong platform does also bring flexible financing options.

03:13Now, if a company does combine both of those,

03:16then it gives them much more of an ability to expand globally.

03:21And I think that's what we've seen today.

03:23How insulated is CATL from American trade policies under President Trump?

03:32Yeah, I think it definitely does bring into doubt sort of, you know,

03:34the ambitions as far as the US is concerned.

03:37It is on a Pentagon blacklist due to supposed links to Chinese military,

03:46although that's denied by the company.

03:48So I think it's fair to say that the ambitions will be focused much more on Europe for the time being.

03:53Obviously, we've seen factories are being built already in Germany and Hungary.

03:58There is potential for joint ventures in Spain.

04:01So I think Europe's going to be the focus rather than the US right now.

04:05Fiona, good to see you.

04:06Thanks so much for coming back on the programme.

04:08Fiona St. Cotta, the analyst at Citi Index.

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