CATL’s Hong Kong-Shenzhen share premium grows after JPMorgan upgrade
The stock’s strength in both markets reflects confidence in China’s energy storage sector
The US bank also predicted stronger demand for CATL’s energy storage systems. CATL’s Hong Kong shares ended the trading day 7.4 per cent higher at HK$465, the highest since its May listing, while its Shenzhen-listed shares closed 9.1 per cent higher at 354.70 yuan.
The stock’s strength in both markets reflected renewed confidence in China’s energy storage sector and put its Hong Kong shares at a 20 per cent premium to their mainland counterparts. Out of the 161 dual-listed Chinese companies, only six firms’ offshore stock commands a higher valuation.
Typically, shares listed in Hong Kong trade at a discount to those on the mainland because of stronger onshore retail participation and tighter capital controls. CATL’s situation reflects an outsized offshore appetite for the world’s largest EV battery maker, which is seen as a proxy for China’s clean energy ambitions.
“Valuations in the H-share market tend to be more representative and reasonable, because they reflect assessments from international investors within a global capital market framework,” said Kenny Tang, chairman of the Hong Kong Institute of Financial Analysts.
He added that policymakers were promoting the A+H model to encourage major firms to list in Hong Kong and use international pricing power to guide more reasonable A-share valuations, with CATL’s premium a case in point.