Battery producer to raise 20b yuan in funds

CATL plans to raise funds of no more than 20 billion yuan ($2.86 billion) through private placement, according to its nonpublic offering plan published on Feb 26 evening, the National Business Daily reported.

The battery producer plans to invest in five lithium battery projects with the funds, and expects a battery capacity expansion of 52 gigawatt-hours.

According to the National Business Daily, the price of the nonpublic offering this time stands at no less than 80 percent of CATL's average stock price in the previous 20 trading days in the A-share market. As of now, the private placement has been the biggest one of its kind for CATL since the nation's new refinancing regulation was put into effect.

The battery producer said it will issue stocks to at most 35 chosen investors.

Its nonpublic offering plan showed that power battery shipments for CATL in 2019 reached 32.5 GWh, up 38.89 percent year-on-year.

Data from GGII, a Shenzhen-based advisory body focusing on emerging industries, also represented that CATL's market share in installed capacity of power batteries rose from 41.27 percent to 51.79 percent year-on-year by the end of 2019.

Undoubtably, if all of the five funded projects are put into operation, CATL will expand its advantage over other competitors, the National Business Daily said.

GGII predicted, by 2025, global sales of new energy passenger vehicles are expected to reach 11.50 million, a compound growth rate of 31.6 percent from 2019.

Statistics from the China Association of Automobile Manufacturers showed that sales of new energy vehicles merely accounted for 4.68 percent of the total auto sales in China in 2019. By 2025, the ratio is expected to rise to about 25 percent according to the Ministry of Industry and Information Technology.

The National Business Daily said, if the total auto sales remained stable, the market scale of new energy vehicles would grow by four times from 2020 to 2025. If battery prices hold steady, the industrial scale of power batteries will grow by four times too.

Since October 2019, the stock price of CATL has risen all the way up from 70 yuan per share to 169.89 yuan per share, the highest amount recorded so far. As of Feb 27, the market value stood at 330.1 billion yuan with a stock price of 149.48 yuan per share.