Contemporary Amperex Technology (03750) listed and received favor: transition to zero-carbon technology, market value surged to HKD 1.5 trillion in two days.

This year's largest IPO in the world, excluding cornerstone subscriptions, was oversubscribed by up to 30 times. The offering price was set at the upper limit of 263 Hong Kong dollars, and the global zero-carbon economy leader Contemporary Amperex Technology (03750) was highly favored by the market for its Hong Kong listing. It was reported that on May 20, Contemporary Amperex Technology officially debuted on the stock market. The company submitted its application on February 11 this year, held a hearing with the Hong Kong Stock Exchange on May 6, and conducted its IPO from May 12-15. The global offering of shares totaled 135 million shares before the greenshoe option, with an issue price of 263 Hong Kong dollars, at the upper limit of the price range, with no discount compared to A-shares. On the day of the company's listing, investors eagerly subscribed for shares, with the stock opening 12.55% higher on the first day, reaching a peak intra-day increase of over 18%, and closing with a gain of 16.43%. The following day, the stock opened even higher, with an intra-day increase of over 11%. This successful listing signals a new journey for the company's global capitalization. The lineup of investors participating in the cornerstone subscription was strong, including Sinopec and the Kuwait Investment Authority (KIA), among others. According to the cornerstone investment agreement, these investors subscribed to shares totaling approximately $2.628 billion. In addition to the cornerstone investors, institutional subscriptions were highly active, with orders from institutions exceeding $50 billion. The international portion of the basic issue received over 30 times oversubscription, while the Hong Kong public offering portion received 151 times oversubscription. According to public data, this issuance by Ningde set several records: The total number of shares offered globally was 118 million, with an issue price of HKD 263.00 per share. This is the first A+H dual-listed project to set the price at only the upper limit, with the smallest discount compared to the A-share closing price in the past 10 years, achieved with zero discount. The project was highly efficient, taking only 47 days from announcement to submission of the prospectus and completing the project in 128 days from initiation to completion. The investors attracted by this offering were diverse in properties and regions, covering 15 countries and regions. The company's founder, Zeng Yuqun, stated that the listing on the Hong Kong Stock Exchange means that the company is more deeply integrated into the global capital market, while also driving a new starting point for the global zero-carbon economy. He emphasized that Ningde is not just a manufacturer of battery components, but also a provider of system solutions, and is committed to becoming a zero-carbon technology company. In the broader trend of global energy transition, the zero-carbon economy is rapidly emerging. In fact, Contemporary Amperex Technology has leveraged its scale advantage and early-mover advantage to complete the layout of zero-carbon technology, making full preparations for the era of zero-carbon economy and becoming a global leader in the zero-carbon economy. This company has moved beyond the comfortable circle of the traditional lithium battery industry, and the investment logic has fundamentally changed. Committing to transform into zero-carbon technology and become a "leader" in the zero-carbon economy Battery suppliers and zero-carbon technology are two different dimensions, with the former being just a part of the latter. Contemporary Amperex Technology has transformed its business model gradually from a battery supplier to a zero-carbon technology company. The company is closely following the national dual-carbon policy, with a clear zero-carbon strategic positioning, focusing on three core tracks in the global zero-carbon transportation, global zero-carbon power, and global industrial new energy fields. Through a comprehensive technical system, innovative business applications, and outstanding zero-carbon practices, the company is promoting the arrival of the era of global zero-carbon economy. From key zero-carbon steps to the entire zero-carbon ecosystem, the company has positioned itself as a global leader and opened up a new trillion-dollar market in the zero-carbon economy. Contemporary Amperex Technology is the global leader in the era of zero-carbon economy, not just in words, but in the leadership effect exerted under a comprehensive layout, with three core dimensions: The first dimension is the "king" in multiple fields of zero-carbon transportation, with an unshakable market position. Ningde's layout in the power battery business has been the global leader in the new energy vehicle market for eight consecutive years, with a market share of nearly 40%, far exceeding the second place. This is due to the company's leading position in product technology, with products used in new energy passenger cars including Kirin batteries, Shenxiao batteries, and Xiaoyao batteries, and commercial vehicles using Tianxing batteries, creating the most advanced and comprehensive product matrix globally. Through technological innovation, the company continues to break through the technical bottlenecks of batteries, such as introducing sodium-ion batteries and solid-state batteries, solidifying its market position. At the same time, Contemporary Amperex Technology actively explores the multiple scenarios of zero-carbon transportation, such as the layout in the battery swapping field with the "Chocolate Battery Swap" and self-developed one-stop heavy truck chassis battery swapping solution, Qiji Battery Swap, collaborating with industry partners including Sinopec, Didi, and NIO, to deepen the layout of the battery swapping ecological network. As of now, Ningde's Chocolate Battery Swap network has been implemented in 16 cities, with plans to complete 30 cities and 1,000 stations by the end of the year. The company is core in promoting the development of the battery swapping model through vehicle-electric separation and standardization of batteries, and has recently officially released standardized battery swapping blocks and all-scenario chassis battery swapping solutions in Datong, Shanxi, striving to build a heavy-duty truck battery swapping network covering 80% of the national trunk capacity by 2030. Additionally, it has successfully test-flown a 4-ton civilian electric aircraft in low-altitude scenarios and has about 700 electric vessels equipped with Contemporary Amperex Technology batteries in maritime scenarios. While the penetration rate of new energy vehicles exceeds 40%, the electrification of other scenarios is currently relatively low. However, each scenario has the potential to generate a market cake not inferior to the trillion-dollar level of new energy vehicles. The second dimension is to accelerate the global deployment of zero-carbon power and create a new type of zero-carbon power system. Wind power and photovoltaics have seen explosive growth and made significant contributions to energy transition, but there is a problem with power consumption, and energy storage is the best solution. Ningde ranks first in the world in the field of energy storage, with its products covering 52 countries and regions globally and being applied in over 1,700 projects. The shipment volume of energy storage batteries has been the leading position for four consecutive years.Number one globally in terms of sales volume, with a market share close to 40%.rary Amperex Technology Contemporary Amperex TechnologyThe market value of Rary Amperex Technology is only 3 times its estimated PS value, there is room for its market value to double.Although monopolies in different industries have different valuation methodologies, they all have similar characteristics. Contemporary Amperex Technology has been accelerating the output of lithium iron phosphate battery technology to North American car companies such as Ford and Tesla since 2023 through the "technology license + production line service" LRS model. In essence, this is the "ARM model" in the energy field, achieving a higher valuation system through "hardware + technology premium," similar to the models of companies like Nvidia and Tesla. From an absolute valuation perspective, in 2024, Contemporary Amperex Technology's non-GAAP net profit was 44.93 billion yuan, and the EBITDA profit including depreciation and amortization was about 70 billion yuan, with a profit margin of 19.34%. Even in the context of industry adjustments, it still achieves considerable sustainable profits. After the company's transformation into zero-carbon technology, driven by three major business segments, and conservatively calculated based on a compound annual growth rate of 50% over the next five years, its revenue is expected to reach 1.8 trillion yuan. Assuming that the profit margin remains the same, the EBITDA profit will reach 354.4 billion yuan. Importantly, the company retains a significant amount of cash every year, far exceeding all interest-bearing debts. Compared to other industry monopolies, Nvidia currently has the highest value multiple, reaching 44 times, while Alibaba and TSMC are basically the same, even at 16 times. Calculated at 16 times, the enterprise value of Contemporary Amperex Technology over the next five years is 5.67 trillion yuan, equivalent to 6.15 trillion Hong Kong dollars. If future investments in interest-bearing debts are increased and the balance between cash and interest-bearing debts is achieved, the market value will be equal to the enterprise value, representing a premium of up to 417% compared to the current IPO valuation. In conclusion, Contemporary Amperex Technology has evolved into a zero-carbon technology company, embracing the zero-carbon economy era. By focusing on its three main segments, the company will leverage its scale, layout, and technology advantages to work with global partners, seize the large opportunities in the zero-carbon economy, become a leader in this ecosystem, and drive the realization of dual-carbon goals. The company's current valuation is low, attracting investors on its first day of trading, and with accelerated profit growth over the next five years due to fundamental transformation, it is a good time to invest.