The China Security Regulatory Commission (CSRC) approved the initial public offering (IPO) application of Chinese battery giant Contemporary Amperex Technology (CATL) in the night of May 18. CATL will be listed on the ChiNext board in Shenzhen.
The CSRC stated that CATL needs to negotiate with the Shenzhen bourse to determine the schedule of stock issuing, and will publish prospectus successively. The total funds from the listing will be no more than RMB 6 billion, which is far less than the planned RMB 13.1billion funds from CATL's released prospectus.
CATL stated on the prospectus that if the approved funds are less than it planned, the company will raise the rest funds by itself to ensure the successful implementation of its planned project.
According to CATL's prospectus which was updated in March, 2018, the company planned to issue no more than 217 million shares, or no less than 10% of its total shares, to raise RMB13.12 billion to finance the expansion of production capacity.
Established in 2011, CATL sells batteries for cars, buses, and logistics vehicles. Its net profits attributable to shareholders soared continuously during 2015 and 2017. However, the battery giant's performance in net profit excluding non-recurring profit and loss was not that good. Particularly in 2017, CATL suffered a 16% YoY slide in net profit excluding non-recurring profit and loss. In addition, CATL experienced production utilization slump for two consecutive years since 2016.
CATL alarmed in the prospectus that if the future market demands are less than expectation, the market will undergo over capacity in structure and phase. With the increasingly intense competition and ever-growing consumers' demands in the market, CATL will also face intense pressure from the market competition.
