Contemporary Amperex Technology (CATL) witnessed a significant surge in its Hong Kong shares following an upgrade by JPMorgan Chase, marking a continued positive trend for Chinese battery manufacturers and widening the premium of its Hong Kong-listed shares over those on the Shenzhen Stock Exchange.
The upgrade by the US bank was accompanied by a bullish outlook on CATL’s energy storage systems, driving its Hong Kong shares to close 7.4% higher at HK$465, reaching their peak since the company’s listing in May. Simultaneously, its Shenzhen-listed shares also saw a notable uptick, closing 9.1% higher at 354.70 yuan.
This dual-market strength not only underscores growing confidence in China’s energy storage industry but also positions CATL’s Hong Kong shares at a remarkable 20% premium compared to their mainland counterparts. Among the 161 Chinese companies listed on both exchanges, only a handful command a higher valuation for their offshore shares.
Typically, shares listed in Hong Kong trade at a discount to those in mainland China due to various factors such as differing investor profiles and regulatory environments. However, CATL’s current premium reflects an exceptional demand among international investors for the leading EV battery maker, which is viewed as a key player in China’s sustainable energy initiatives.
Kenny Tang, Chairman of the Hong Kong Institute of Financial Analysts, highlighted that valuations in the H-share market often provide a more globally informed and rational assessment, reflecting input from international investors within a broader capital market context. He also noted that policymakers are actively encouraging the A+H dual-listing model to attract major corporations to list in Hong Kong, leveraging international pricing dynamics to influence more balanced A-share valuations, with CATL’s premium serving as a prime example.
The growing premium of CATL’s Hong Kong shares signifies not only investor confidence in the company’s future prospects but also broader trends in the global energy storage sector. As the world transitions towards cleaner energy solutions, companies like CATL are poised to play a pivotal role in shaping the future of sustainable transportation and energy storage.
Overall, CATL’s performance in the stock markets reflects a broader narrative of shifting investor preferences towards companies driving innovation in renewable energy and electric mobility. The premium on its Hong Kong shares signals a strong endorsement from international investors, underlining the company’s strategic positioning in the evolving landscape of clean energy technologies.
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