JPMorgan Chase and Bank of America are continuing to push ahead with a Hong Kong IPO deal for Chinese battery giant CATL despite opposition from a U.S. lawmaker.
The two U.S. banks are acting as joint sponsors along with CICC and China Securities International, according to CATL's post-hearing information pack released Tuesday.
Compared with the overall coordinator announcement on Feb. 11, the list of sponsors and overall coordinators in this filing remains unchanged.
Meanwhile, Goldman Sachs and Morgan Stanley, also U.S. banks, and Switzerland's UBS are arranging CATL's planned Hong Kong listing.
CATL began assessing investor interest in its Hong Kong listing this month and may raise $5 billion through the share offering. If the offering is successful, it would be Hong Kong's biggest IPO since 2021.
"Global banks probably need CATL more than CATL needs them," Han Shen Lin, China director at consultancy firm The Asia Group, told Bloomberg.
"Times are tough for global banks covering China, and all evidence points to the situation getting tougher."
Global banks also provide legitimacy for other institutions to work with CATL in the future, he said.
In letters last month to JPMorgan CEO James Dimon and BofA CEO Brian Moynihan, John Moolenaar, chairman of the U.S. House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, said the two banks should withdraw from the IPO in light of CATL's alleged ties to the Chinese military.
In response to the allegations, CATL has always emphasized that it has never engaged in any military-related business or activities.
Large equity sales usually involve global banks in an advisory, underwriting or similar capacity. CATL, for example, hired global banks like BofA and J.P. Morgan as co-sponsors for its Hong Kong IPO.
But that's not the case in another recent Hong Kong IPO.
On April 30, CaoCao Inc., an online ride-hailing platform backed by Geely Group, announced that it had appointed Huatai Financial Holdings (Hong Kong) Limited and GF Securities (Hong Kong) Brokerage Limited as sponsors and overall coordinators, and ABCI Capital Limited and CICC Hong Kong Securities Limited as overall coordinators.
It can be seen, CaoCao did not hire global banks like JP Morgan, Goldman Sachs for its Hong Kong IPO, but chose two Chinese banks to lead the relevant matters.
Without the endorsement of a global bank, will this have an impact on CaoCao's Hong Kong IPO plans? It's unclear at this point.
As for the phenomenon of not having a global bank involved in such IPOs, Bloomberg analyzes that cost considerations are a factor.
Certainly, Chinese investment banks tend to offer cheaper advisory, financing and other services compared to global banks. As a result, local banks are the better choice for some companies that are considering budgeting for IPO costs.
On top of that, this is also attributed to some U.S. banks being more selective in deals to protect profits and avoid being associated with companies that may have exposure to the U.S. sanctions.
Nonetheless, the Hong Kong IPO market has been revitalized in 2025. So far this year, companies have raised a total of about $2.7 billion through initial public offerings and secondary listings in Hong Kong, an increase of about 170% year-on-year, according to data compiled by Bloomberg.
Separately, Securities Daily reported that as of May 5, 46 companies listed on the Chinese mainland were proposing to go public in Hong Kong, including Foshan Haitian Flavoring & Food Co.Ltd., Eastroc Beverage (Group) Co., Ltd., CATL, Lens Technology Co., Ltd. and Hengrui Pharmaceuticals Co., Ltd., most of which are from the consumer and technology sectors.
The Chief Executive of the Hong Kong SAR, John Lee Ka-chiu, also said at a press conference on Tuesday that in order to further assist enterprises specializing in technology and biotechnology in raising capital to develop their business, the HKEx will open a special line for science and technology enterprises.
It is foreseeable that this policy support will further boost IPO activities in Hong Kong.
