Chinese EV battery maker CALB targets top three after IPO

The newly listed Hong Kong-listed CALB aims to become one of the top three players in the electric vehicle battery industry within five years, CEO Jingyu Liu said.

Shares of the Jiangsu Changzhou-based company closed at HK$38 (US$4.84), in line with its IPO price, after falling to HK$37.15. The offer raised around HK$10.1 billion ($1.3 billion) and the shares sold were sold at the bottom of the market price range, which climbed to $51.

In an interview with Bloomberg Television, Liu said, “Within a year, we want to be among the top five in the global EV battery market, and within three to five years, we want to be number three.

The company is currently building production lines totaling over 200GWh per year. Liu, the only female CEO of one of the world’s top 10 battery manufacturers, said, “With this increase in battery capacity, we will be among the top in the world.

China Aviation Lithium Battery Technology, as it is officially known, was established in 2015 under Luoyang. Luoyang is a wholly owned arm of the China Airborne Missile Academy, part of China’s Aerospace Industry Group, a state-owned aerospace and defense company.

Xpeng Supplier’s lofty goals require payment for expansion. Liu said a public offering was a “natural next step” in the high-growth sector.

“Our IPO funds will be used for business expansion and research and development,” Liu said. “However, we are financially stable and have sufficient capital for our current needs.”

CALB expects its domestic battery market share to increase “significantly” as production increases, followed by “substantial growth” in overseas markets from 2024.

According to SNE Research, the company ranks seventh among global EV battery suppliers, but falls short to bigger rivals China’s Contemporary Amperex Technology, followed by South Korea’s LG Energy Solution and BYD. .

Market leader CATL plans to build factories in the country, and has already said it has committed about $20 billion worth of spending this year to remote Hungary and resource-rich Indonesia.

CALB is experiencing the worst of the industry-wide price shocks, said Liu, as the EV supply chain grapples with soaring prices for key battery materials such as lithium and copper. Margins continue to grow, first quarter profit is up year-over-year, second quarter profit is up over first quarter.

“We expect earnings to continue to increase in subsequent quarters,” she said. “Working with upstream suppliers to recycle batteries reduces costs in the supply chain.”

Although smaller than originally expected, CALB is the third largest IPO in Hong Kong this year. Still, money raised in the city is down about 75% since the beginning of January, as rising interest rates roil markets and keep issuers on the sidelines.

After making more than $100 million in sales this year, half of the 18 Hong Kong-listed companies ended their first session underwater. On the first day he was five little changed and only four rose.

CALB’s debut comes a week after Chinese EV maker Zhejiang Leapmotor Technology’s first trading day plunged 34%. The drop was the biggest first-day drop for a listed company of a similar size or larger on record in Hong Kong.

Huatai International is the sole sponsor of CALB’s Hong Kong IPO.

Credit: Bloomberg

Credit: Bloomberg

Credit: Bloomberg Chinese EV battery maker CALB targets top three after IPO

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