China's CATL believes EV BOOM shares are up nearly 18% in Hong Kong

Stake in the world's largest battery manufacturer Contemporary Ampere Technology As investors bet on the company's ability to ride electronic cars, it rose more than 18% in its debut in Hong Kong trading.

The final trading price of the stock on the Hong Kong Stock Exchange was 309 Hong Kong dollars, while the initial public offering price was HK$263 per share.

According to a company filing, CATL's IPO raised HK$35.7 billion (US$4.6 billion), which is reportedly the world's largest product this year. CATL stock has a low open rate on the Shenzhen Stock Exchange in mainland China, which reversed 1.5% to 264 Chinese yuan.

“I think that as H (Hong Kong) stock continues to perform well, this will attract shares in A (mainland China),” Neil Beveridge, senior research analyst at Bernstein, told CNBC's “China Connection.”

He added: “Having the A shares above H shares traded only shows the excellent demand of the company, especially for global investors.”

CATL said in a Hong Kong filing that 90% of the funds raised will go to build its upcoming factory in Hungary, aiming to provide batteries to European auto customers StellantisBMW and public.

“Europe is a very important market for CATL,” Beveridge said, adding that the company's growth will slow in the coming years due to the already high sales penetration. He added: “The penetration rate in Europe is about 20-25%, so there is still a lot of growth.”

The company's push to enter Europe coincides with the global expansion of Chinese electric vehicle manufacturers such as Byd. These efforts have also happened during US and EU reviews, which imposed unfair trade practices on China's electric vehicles last year, which put punitive tariffs on China's electric vehicles.

CATL also found itself in the crosshairs of the U.S.-China trade earlier this year, where the Pentagon placed it on a surveillance list in January due to suspicious links to the Chinese military – the company refused.

The name of the surveillance list, along with Trump’s latest tariffs on China, could complicate the company’s U.S.-related operations, according to Bill Russo, founder and CEO of investment consulting firm Automation.

However, unless there are wider multilateral restrictions, the impact on global ambitions may be limited, as CATL's core strategy remains concentrated in markets such as Europe and emerging regions.

In March, CATL's annual revenue fell 9.7% in 2024, hit by fierce competition in China's electric vehicle market, which puts huge pressure on the world's top battery manufacturers. Nevertheless, the company's net profit rose 15% year-on-year.

CATL's key market demand for electric vehicles gained momentum after a combination of subsidies and consumer purchasing incentives last year. China's electric vehicle sales soared to 2024 in 2024, up 40% from the previous year, according to data from British research firm Rho Motion.

“We are loyalists and investors in CATL in our global electric vehicle strategy. It's amazing, I think it's a must-own company, and BYD for investors in this space,” said Brendan Ahern, Chief Investment Officer of Kranesshares.

Bank of America, China International Capital Corporation, Goldman Sachs, Morgan Stanley and JPMorgan Chase are co-chief managers of Hong Kong products.

Andy Maynard, managing director and head of stock at China Renaissance, said in a speech at CNBC's Squawk Box Asia on Tuesday that CATL's IPO showed that investors are still looking for quality games in China despite the recent trade tensions between Beijing and Washington.

Correction: This story has been revised to accurately reflect the leap in the market for stocks.