Founder of China EV batteries maker becomes billionaire overnight

Tokyo

THE Chinese founder of the world's biggest maker of electric-vehicle batteries and his top lieutenant became billionaires on Monday after their company's shares soared during the first day of trading in Shenzhen.

Contemporary Amperex Technology (CATL) jumped by the maximum 44 per cent allowed by the exchange, valuing the company at about US$12.3 billion. That cemented the position of Zeng Yuqun, CATL's founder and top shareholder, on China's rich list with an estimated net worth of about US$3.4 billion, according to Bloomberg Billionaires Index.

Investors are confident that CATL can fend off rivals Panasonic, which makes power packs with Tesla; Warren Buffett-backed BYD; and LG Chem as the increasing popularity of EVs boosts demand for the batteries that move them. CATL, whose customers include Volkswagen, previously cut the size of its IPO by more than half, compared with its original ambitions, because of declining margins and a cap imposed by Chinese authorities on price-earnings ratios in IPOs.

The IPO made CATL the biggest company on China's Nasdaq-style ChiNext list. Mr Zeng, a 50-year-old engineer who started CATL seven years ago, owns a 26 per cent stake. Vice-chairman Huang Shilin holds 12 per cent and has an estimated net worth of US$1.7 billion.

Macquarie Bank in Hong Kong rated CATL outperform on Monday and set a price target of 90 yuan (S$19), more than double Monday's closing price of 36.20 yuan.

CATL, which also supplies Nissan Motor, Hyundai Motor and BMW, last year overtook Panasonic as the world's largest supplier of EV batteries by sales.

The government's generous subsidies for new-energy vehicles and restrictions on petrol cars in some cities will help battery demand quadruple in the next four years in China, Bloomberg New Energy Finance said in a report Monday. CATL is best-positioned to benefit because of its advantages in capacity and customer base, BNEF said.

Mr Zeng's decision to found CATL in 2011 marked a gamble on Chinese policy. Just 1,014 alternative-energy vehicles were sold in China that year, according to Bloomberg Intelligence. BLOOMBERG