CATL, the world's largest battery manufacturer based in China, saw its stock price surge more than 16% on the first day it was listed on the Hong Kong Stock Exchange. Previously, CATL was listed on the Shenzhen Stock Exchange's ChiNext, which limited investments, but now domestic individual investors have the opportunity to invest in CATL's individual stocks. However, there are concerns as CATL's Hong Kong stocks (H shares) are more expensive than its mainland stocks (A shares).
Park Ju-young, a researcher at Kiwoom Securities, evaluated this in a report titled 'CATL: Hong Kong Stock Exchange listing, why now?' on the 21st. Through this Hong Kong Stock Exchange listing, CATL raised 35.7 billion Hong Kong dollars (approximately 6.4 trillion won), with plans to invest 90% of it in a factory in Hungary.
Park noted, "Considering the growth potential of the global battery market and CATL's competitiveness, I believe the investment appeal is high."
However, there are several points to keep in mind. First, CATL's H shares are 7% more expensive than A shares. This is the highest premium among 153 companies listed simultaneously on the Hong Kong and mainland stock markets, according to Park.
Additionally, CATL's current stock price reflects a projected price-to-earnings ratio (P/E ratio) of 17 for 2026. Park stated, "While CATL's valuation is not burdensome, there are no special momentum drivers in the short term other than the negotiations between China and Europe regarding electric vehicles," adding, "I believe there is some downside risk as the stock price has rebounded somewhat compared to historical lows."
In the first quarter (January to March) of this year, CATL's performance fell short of market expectations in terms of sales, while profits slightly exceeded expectations. The energy storage system (ESS) battery sector has struggled for two consecutive quarters due to the cancellation of China's installation mandate policy and delays in recognizing overseas revenue.
Park mentioned, "There is uncertainty in the ESS battery sector in the short term," but added, "The medium to long-term growth potential of the electric vehicle and ESS battery markets in China and globally remains, and CATL maintains a high market share due to its cost and technological competitiveness."