$Contemporary Amperex Technology (300750.SZ)$ The plan for listing H-shares has entered the sprint stage.

On February 11, Contemporary Amperex Technology officially submitted an application to the Hong Kong Stock Exchange for the issuance of Overseas Listed Foreign Shares (H Shares) and for listing on the Main Board of the Hong Kong Stock Exchange. According to reports, the funds raised from this Hong Kong listing will be mainly used for overseas capacity expansion, international Business development, and supplementing overseas working capital, providing financial support for the company's long-term Global Strategy.

Contemporary Amperex Technology has the largest Lithium Battery production capacity in the world, with one in every three Electric Vehicles globally equipped with Contemporary Amperex Technology batteries. The prospectus shows that the market share of Contemporary Amperex Technology's power Battery has remained the first globally for eight consecutive years since 2017, and the market share of energy storage Battery shipments has remained first globally for three consecutive years since 2021.

In recent years, Contemporary Amperex Technology has been promoting the construction of global capacity layout to meet the demand of overseas manufacturers for 'local support'. By the end of 2024, Contemporary Amperex Technology has just announced a joint venture with Stellantis in Spain, which will be Contemporary Amperex Technology's third major battery production base in Europe. Earlier, Contemporary Amperex Technology's factory in Thuringia, Germany, became the first battery base in Europe to receive certification for Volkswagen Cells, while the Hungary factory and the battery industry chain project in Indonesia are also accelerating.

The prospectus clearly states that the intended use of the funds raised from the proposed H-share listing includes advancing the first and second phases of the Hungary project. According to earlier plans, Contemporary Amperex Technology intends to invest in a production line for a yearly output of 100 GWh of power battery systems at its base in Debrecen, Hungary, with a total investment amount expected to not exceed 7.34 billion euros, and a total construction period expected to not exceed 64 months. Among these, the total investment for the first and second phases is about 4.9 billion euros. Currently, the project has completed preliminary preparations and has started construction, with an investment of approximately 0.7 billion euros by the end of 2024.

The listing of Contemporary Amperex Technology's shares on the Hong Kong stock market primarily aims to build an overseas financing platform. The team from Soochow Securities stated, 'As of the end of the third quarter, Contemporary Amperex Technology has more than 260 billion yuan in cash on hand, with strong financial strength, but the company's subsequent capacity expansion is mainly focused overseas. The production capacity in Hungary and Spain is expected to gradually go into production from 2025 to 2026, with subsequent annual overseas capital expenditure exceeding 2 billion euros.'

Building and operating factories overseas often requires a substantial reserve of Forex such as euros and dollars. According to publicly disclosed information, as of June 2024, the foreign currency balances of Contemporary Amperex Technology were 6.735 billion US dollars and 3.858 billion euros respectively, which are insufficient to cover investments that can easily amount to billions of euros and ongoing overseas strategic layout needs in Europe and other regions.

Analysts told reporters that through this H share listing, Contemporary Amperex Technology can effectively reserve Forex funds to provide sufficient "ammunition" support for overseas projects, and enhance the ability to integrate cross-border resources through an international capital platform, further allocate Global resources, and improve the company's Operation efficiency and profitability.

The prospectus did not disclose the issuance scale of Contemporary Amperex Technology's H shares, and inquiries were made to Contemporary Amperex Technology but no positive response was received. According to the expectations of the team led by Zeng Duohong, the total issuance scale of Contemporary Amperex Technology this time will not exceed 40 billion yuan. Today, other foreign media reported that Contemporary Amperex Technology is expected to raise at least 5 billion US dollars, which corresponds to more than 36.5 billion yuan.

In addition to creating an international capital platform, leveraging international capital power to strengthen deep cooperation with upstream and downstream enterprises in the Global Industry Chain, and thereby accelerate business expansion and technological innovation, is also one of the goals of Contemporary Amperex Technology's H share listing.

According to the prospectus, the overseas automotive clients served by Contemporary Amperex Technology include BMW, Mercedes-Benz, Stellantis, Volkswagen, Ford, Toyota, Hyundai, Honda, Volvo, etc.; overseas energy storage clients include NextEra, Synergy, Wärtsilä, Excelsior, Jupiter Power, Flexgen, etc.

Through the opportunity of listing in Hong Kong, Contemporary Amperex Technology expects to further integrate into the Global market and attract more potential overseas clients or partners. At the same time, listing in Hong Kong helps Contemporary Amperex Technology establish closer ties with international institutional investors and strategic investors, promoting diversification of the Shareholder structure, facilitating strategic collaboration, thereby further consolidating its leading advantage in the Global market.

Reporters noted that the China Securities Regulatory Commission has recently made clear statements to strengthen financial services for technology enterprises across the entire chain and life cycle. The "Implementation Opinions on Capital Markets to Achieve Financial 'Five Key Areas'" issued last week proposed supporting high-quality technology enterprises in issuing and listing, continuously promoting the implementation of a series of policies such as 'Technology Sixteen Articles' and 'Star Eight Articles', enhancing the inclusiveness for new industries, new business formats, and new technologies, and guiding technology enterprises to rationally utilize the 'two markets, two resources' of domestic and Overseas listings.

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