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Biggest electric-vehicle battery maker soars on trading debut
[TOKYO] Shares of the world's biggest maker of electric-vehicle batteries jumped on their trading debut as investors bet on rising demand for new-energy cars worldwide.
Contemporary Amperex Technology Ltd. advanced 32 per cent to 33.19 yuan at 9:31 a.m. in Shenzhen, China, valuing the company at about US$11.3 billion (S$15.1), before trading was halted. The manufacturer sold a 10 per cent stake at 25.14 yuan a share in its initial public offering on May 30.
Investors are confident that CATL, as the company is known, can fend off rivals including Panasonic Corp. and continue to win orders as automakers move toward electric vehicles. CATL, whose customers include Volkswagen AG, had reduced 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.
CATL, which also counts carmakers Nissan Motor Co., Hyundai Motor Co. and BMW AG as clients, last year overtook Panasonic as the world's largest supplier of EV batteries by sales, thanks to increasing domestic demand.
Still, CATL's gross margin shrank 9.5 percentage points last year to 35 per cent. The company lowered battery prices to gain market share after the government reduced electric-vehicle subsidies, weighing on profitability, founder Zeng Yuqun said last month.
CATL has said it will use the proceeds to help finance a new 24 gigawatt-hour factory at its home base of Ningde, Fujian Province, and to develop next-generation battery technologies. CATL is supplying its cells to a slew of new cars being introduced by global auto majors in China, including Toyota Motor Corp.'s ix4, a rebadged pure EV developed by its Chinese partner Guangzhou Automobile Group, and Hyundai's plug-in version of the Sonata.
The company is also nearing a decision to build a battery factory in Germany, planting a flag on the home turf of car giants Volkswagen, BMW and Daimler AG as part of a push into Europe, people familiar with the matter said last week.
Zeng, the largest shareholder, is cementing his position on China's rich list along with the IPO. He said last month that CATL will in the next three years "grasp the opportunities of the fast growth in the global lithium-ion battery market, and maintain our leading position in technologies, manufacturing, capacity and talents."
While CATL is the biggest manufacturer of batteries when including all electric-vehicle types, Panasonic is the largest maker of batteries for the narrower category of regular-sized electric cars, also known as highway capable passenger electric vehicles, according to Bloomberg New Energy Finance.