Financial Analysis: New Energy Companies Flock to Hong Kong Stocks, Targeting Financing and International Expansion
Since 2024, there has been a surge in new energy companies seeking to list on the Hong Kong Stock Exchange. This wave includes companies already listed on the A-share market, as well as leading enterprises and those that turned to Hong Kong after failing to list in China. Some of these companies are currently facing declining performance or losses, a situation that has drawn significant market attention.
Increasing Momentum for New Energy Companies Going Public in Hong Kong
According to statistics from Xinhua Finance, over 22 new energy companies have announced plans to list in Hong Kong since the beginning of 2024, spanning various sectors including photovoltaics, lithium batteries, and energy storage. Notable industry leaders are among these companies.
For instance, JunDa Co., Ltd. has submitted its listing application twice. On October 14, 2024, the Hong Kong Stock Exchange disclosed that JunDa had submitted its application again. The company initially applied on February 6, 2024, but its application became invalid after six months on August 6.
CATL announced on December 26, 2024, its intention to issue H-shares and apply for a main board listing on the Hong Kong Stock Exchange. On February 11, 2025, it officially submitted its H-share listing application.
JA Solar Technology submitted its H-share listing application to the Hong Kong Stock Exchange in February 2024, with plans to issue H-shares announced on February 21, 2025.
On February 25 of this year, XianDao Intelligent submitted its application for a public offering of H-shares and a main board listing in Hong Kong. On the same day, Shuangdeng Group also submitted a listing application.
Additionally, Jinsheng New Energy filed its prospectus with the Hong Kong Stock Exchange in January 2025, while Zhongwei Co., Ltd. announced on February 11 its plan to issue H-shares and list in Hong Kong. The trend of new energy companies targeting the Hong Kong market is becoming increasingly evident.
Urgent Funding Needs and Global Expansion Considerations
Analysis reveals that the reasons behind these companies seeking to list in Hong Kong generally fall into two categories: the need for urgent capital and the desire for international expansion.
A representative from a Shanghai-based photovoltaic company noted that the new energy sector is currently experiencing rapid development and transformation. Companies are actively seeking capital support to address competitive pressures and expansion needs. The global focus on clean energy has led to a continuous increase in the market size, presenting significant development opportunities. However, competition is intensifying, and rapid technological advancements require substantial investments in research, production, and market expansion. In the photovoltaic sector, for example, the total production capacity in 2024 is expected to significantly exceed new installation demand, leading to cost pressures across the industry. JA Solar is projected to incur losses of 4.5 to 5.2 billion yuan in 2024, highlighting the urgent need for financing.
Many companies explicitly state in their announcements that their primary motivation for listing in Hong Kong is funding. For instance, Zhengxin Optoelectronics indicated that as a photovoltaic company, it requires substantial capital support for business expansion and capacity building. Post-listing, the company plans to raise funds through stock issuance to enhance production capacity, invest in new technologies, and expand market reach, thereby strengthening its core competitiveness.
In addition to financing, some companies view the Hong Kong listing as a strategic move for global competition and international expansion.
JunDa Co., Ltd. stated that the funds raised through its IPO in Hong Kong would primarily be used to establish an overseas photovoltaic cell production base with an annual capacity of approximately 5GW, expected to commence commercial production by the end of 2025. The funds will also support the development of advanced technologies and the establishment and enhancement of overseas sales channels, in addition to general operational needs.
Leading Companies’ Hong Kong Listings Aim to Advance International Strategies
Among these companies, CATL stands out. Despite its strong financial position, it has chosen to pursue a secondary listing in Hong Kong. Why is this the case?
CATL’s latest financial report shows that its revenue for 2024 reached 362 billion yuan, with a net profit of 50.7 billion yuan, marking a 15.01% increase year-on-year. The company reported a robust operating cash flow of approximately 97 billion yuan for the entire year and had over 300 billion yuan in cash reserves. CATL plans to distribute a cash dividend of 45.53 yuan for every 10 shares to its shareholders.
Zeng Duohong, co-director of Dongwu Securities Research Institute, explained that CATL’s decision to list in Hong Kong primarily aims to build an overseas financing platform. Although the company has substantial capital, its future expansion will mainly occur overseas. Listing in Hong Kong will facilitate its international strategy, enhance international brand recognition, and accelerate its global electrification transformation ambitions.
Public information indicates that CATL operates 13 major production bases globally (with a total capacity exceeding 700GWh), six research and development centers, and over 730 service stations (156 of which are overseas). The company has robust partnerships with leading global automotive manufacturers and energy groups. Its plant in Thuringia, Germany, is the first battery facility in Europe to receive certification from Volkswagen. Currently, CATL is speeding up projects in Hungary, Spain, and Indonesia. By the end of 2024, CATL expects to have delivered over 1TWh of battery products widely used in zero-carbon construction sectors such as transportation and energy worldwide.
A representative from CATL noted that establishing and operating overseas factories requires significant reserves of foreign currency, including euros and US dollars. The upcoming H-share listing will effectively bolster its foreign currency reserves, providing ample support for overseas projects and enhancing the company’s ability to integrate cross-border resources, optimize global resource allocation, and improve operational efficiency and profitability.
Industry experts point out that while the Hong Kong market offers financing opportunities for new energy companies, they also face numerous challenges. For example, the Hong Kong Stock Exchange has strict information disclosure requirements, particularly regarding environmental and financial matters. New energy companies must enhance compliance management and investment. The exchange mandates that listed companies disclose ESG reports and plans to implement stricter regulations on climate-related disclosures. Additionally, valuations in Hong Kong tend to be lower than those in the A-share market, and liquidity is weaker, especially for smaller firms, which may face the risk of becoming “zombie stocks.” This scenario necessitates that companies improve their profitability and international competitiveness to attract investors.
