CATL likely to offer less than 10% discount for $5 billion Hong Kong listing: Reuters

Prospective investors in Chinese battery giantCATL’s Hong Kong listing to raise about $5 billion have been told the stock may be sold at a discount of less than 10% to the company’s Shenzhen-listed shares, according to three sources with direct knowledge of the matter.

The discount offered could be around mid-single digits, two of the sources added.

CATL is meeting investors ahead of launching the book building for the deal next week that could be the largest new share sale in Hong Kong for four years.

Investors are pushingCATLto price the Hong Kong shares at least a 10% discount to the Shenzhen-traded stock, one of the sources and a fourth person told Reuters.

The pricing has not been finalized, the sources said.

CATLwants to have cornerstone and anchor investors subscribe for around half the shares to be sold in the deal, two of the sources added.

The sources could not be named discussing information that has not yet been made public.

CATLdid not immediately respond to a request for comment from Reuters.

CATLshares were trading 2.33% higher on Wednesday at 237.08 yuan. However, the stock has fallen nearly 11% this year. China’s CSI300 indexwas up nearly 0.5%.

Hong Kong shares typically trade at a discount compared to mainland stocks. Investors are usually offered stock at a cheaper price in offshore listings like this as an incentive to buy into the share offering.

Midea Grouppriced its Hong Kong shares at about a 20% discount when it raised $4 billion in a listing in September last year.

The battery giant’s listing would be the largest in Hong Kong since 2021, when Kuaishou Technology raised $6.2 billion in an initial public offering.

CATLhas previously said in a regulatory filing that part of the funds raised will be used to build a 7.3 billion-euro ($8.28 billion) battery plant in Hungary.