Chinese EV battery maker CALB aims to reach top three in 5 years
Chief Executive Officer Jingyu Liu said that the company is aiming to become a top-three player in the electric vehicle battery industry within five years.
The shares in the firm's Changzhou, Zhejiang opened Thursday at $38 in line with the IPO price. The offer raised more than HK $10.1 billion $1.3 billion with the shares sold at the bottom of a marketed range that went as high as $51.
Liu said in an interview with Bloomberg Television that we want to reach top five in the global EV battery market in a year's time, and be third within three to five years.
The company is building out production lines that will have a combined capacity of more than 200 gigawatt hours. Liu, the only female CEO of a top 10 global battery maker, said that this increased battery capacity will place us among the top few globally.
China Aviation Lithium Battery Technology Co., as it is known, was formed in 2015 under Luoyang Co., a wholly owned unit of the China Airborne Missile Academy, which is part of the state-owned aerospace and defense firm Aviation Industry Corp. of China Ltd.
The Xpeng Inc. supplier has a duty to pay for the expansion. Liu said that going public was a natural next step in the high-growth sector.
Liu said our IPO funds will be used for business expansion and R&D. Our finances have been stable and we have enough capital for current needs. CALB is expecting a big increase in domestic battery market share as it increases output, followed by significant growth in overseas markets in 2024, she said.
According to SNE Research, the company ranks seventh among global EV battery suppliers but is dwarfed by larger Chinese rival Contemporary Amperex Technology Co. Ltd., followed by South Korea s LG Energy Solution Ltd. and BYD Co. all of whom have deep pockets and high ambitions to expand their market share.
Market leader CATL has already unveiled $20 billion worth of spending commitments this year on a slate of factories to be built at home, as far away as Hungary and resource-rich Indonesia.
As the EV supply chain grapples with soaring costs of key battery materials like lithium and copper, CALB has seen through the worst of the industry-wide price shocks, Liu said. Margins has continued to grow, with first quarter profit higher than a year ago, and second quarter earnings higher than the first, she said.
She said we expect our profits to increase every quarter. We will reduce supply chain costs by working with our upstream suppliers and battery recycling. CALB is the third largest IPO in Hong Kong this year, due to mid- to large deals returning after a slow first half. Since the beginning of January, funds raised in the city are down 75%, as rising interest rates roil markets and keep issuers on the sideline.
Half of the 18 companies that have listed in Hong Kong ended their first session underwater this year after offering larger than $100 million. Five finished little changed and only four rose on day one.
CALB's debut came one week after a disastrous first day of trading for Chinese EV maker Zhejiang Leapmotor Technology Co. plunged 34% after raising $800 million in an IPO that was priced at the bottom of the marketed range. The biggest first-day decline for a listing of that size or bigger in Hong Kong was caused by the slide.
Huatai International Ltd. is the sole sponsor of CALB's Hong Kong IPO.
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