New Stock News | Contemporary Amperex Technology (300750.SZ) Hong Kong IPO Sparks Investment Bank Price War, Underwriting Fees "Plunge"

Contemporary Amperex Technology (300750.SZ) submitted an application to list on the main board of the Hong Kong Stock Exchange on February 11th, with rumors in the market suggesting that the fundraising size could reach $5 billion USD, potentially making it the largest IPO in Hong Kong since the listing of Kuaishou in 2021. Due to the rarity of transactions worth tens of billion dollars, competition among investment banks for the listing of Contemporary Amperex Technology in Hong Kong is fierce, and even though underwriting fees are low, investment banks are still willing to get a piece of the pie. Among them, JPMorgan Chase received the role of sponsor for the listing of Contemporary Amperex Technology, with rumors suggesting that the Chairman of Contemporary Amperex Technology, Zeng Yuqun, attended a conference organized by them in Shanghai last year. Contemporary Amperex Technology and JPMorgan Chase declined to comment on this. Other banks involved in the listing process include Bank of America, CICC, China Securities Co., Ltd, Goldman Sachs, Morgan Stanley, and UBS. Craig Coben, a veteran investment banker at Bank of America, stated, "With the drought of transactions lasting so long, winning the first big deal is crucial, and everyone is eager to try to win this deal." Coben, who is set to retire in 2022, was once one of the most senior investment banking executives at Bank of America. It is not uncommon for senior investment bankers to personally handle milestone transactions, but the extent to which investment bankers have been striving for the listing of Contemporary Amperex Technology in Hong Kong reflects the challenges in the capital market following a decrease in transaction activity. With the Hong Kong IPO market heating up in 2024, the fundraising size has doubled to $22 billion USD year-on-year, but high-quality projects are scarce, making top companies a battleground for investment banks. Some bankers have been too busy to take breaks during Christmas and Chinese New Year, focusing on securing business opportunities at the headquarters of Contemporary Amperex Technology in Ningde, Fujian Province. According to the disclosure in the prospectus, HSBC did not secure a role in the listing process, with a representative from HSBC responding that they had no comment. Information shows that the funds raised from the Hong Kong listing of Contemporary Amperex Technology will be primarily used for overseas capacity expansion, international business development, and supplementing overseas operating funds to support the company's long-term internationalization strategy. If the size of this issuance exceeds $5 billion USD, it may become the largest listing transaction in Hong Kong in recent years. Earlier rumors in the market suggested that Contemporary Amperex Technology originally planned to pay a basic underwriting fee of 0.2%, but some investment banks, in a bid to secure a share, pushed the fee down to 0.01%, which is only 1/20 of the industry average level.