In recent times, a remarkable trend has emerged as companies listed on the A-share market have begun exploring secondary listings on the Hong Kong Stock Exchange (HKEx). This shift is particularly pertinent for enterprises in the renewable energy sector, which have turned to Hong Kong as a safe harbor amid a challenging financing environment.

As reported, since the beginning of 2025, a total of 17 A-share companies have announced plans for H-share issuance or provided updates regarding their progressA significant portion of these listings, specifically five companies, hail from the burgeoning renewable energy industryAdditionally, companies from the pharmaceutical, semiconductor, automotive, and food sectors are also part of this wave of listings.

Interestingly, many of the firms pursuing H-share issuance are leaders in their respective industries, aligning with governmental efforts announced in April 2024 to support mainland enterprises in their capital market collaborations with Hong KongThis is seen as an endorsement of industry frontrunners aiming for a more substantial presence on an international platform.

According to investment banking professionals, the tightening of IPO and refinancing policies in the A-share market has necessitated this strategic pivot towards Hong Kong, which is currently perceived as a more accessible avenue for companies needing to bolster their financing capabilitiesDespite the present valuation of the HKEx seeming relatively low, the demand for funds coupled with the strategic importance of expanding overseas presence in some sectors has led to more A+H filings this year.

Recent statistics from Wind indicate that as of now, the number of A+H companies has reached 151, boasting a total market capitalization of approximately HKD 25.34 trillionAmong these entities, several notable renewable energy firms are included such as Yi Hua Tong, Goldwind Technology, Shanghai Electric, Dongfang Electric, and production companies related to hydrogen energy, wind turbine manufacturing, and photovoltaic glass, as well as state-owned power generation firms like China General Nuclear Power Group and Huaneng Power International.

One of the most talked-about cases is that of Contemporary Amperex Technology Co

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Ltd. (CATL), which has established itself as a powerhouse in the power battery sectorWith a staggering market valuation of 1.19 trillion RMB on the A-share market, CATL made headlines by announcing its intention for a secondary listing in Hong Kong set for December 26, 2024, followed by a submission of their prospectus on February 11, 2025. Speculation regarding the company’s interest in a Hong Kong listing had circulated as early as November 2023, and earlier intentions to launch a Global Depository Receipt (GDR) scheme on the Swiss Stock Exchange had also surfaced, albeit without subsequent confirmation.

The bevy of funding announcements from CATL underscores their proactive measures in managing future liquidity needs, indicative of a strategic foresight in navigating the ever-evolving market landscape.

However, financial analyses reveal that CATL has experienced consistent profit growth in recent years, with cash reserves reaching an impressive 264.68 billion RMB as of September 2024—a figure that has grown by over 30 billion RMB year-on-yearThe company anticipates a projected net profit ranging from 49 to 53 billion RMB in 2024, marking a year-on-year increase of approximately 11.06% to 20.12%.

So, the question arises: Why is CATL choosing to seek additional capital through a Hong Kong listing despite its healthy profit margins and ample cash reserve? The company has noted that the funds raised from the Hong Kong market will primarily be allocated towards expanding production capacities overseas, enhancing international operations, and supplementing working capital for its global strategy.

The trend of overseas expansion is evident in CATL’s robust growth trajectoryBy September 2024, the company had approximately 240 GWh of lithium battery capacity under construction, which includes multiple international projects.

Utilizing the Hong Kong platform for capital operations is a common rationale for A-share companies seeking H-listings

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Several renewable energy companies have expressed intentions to intensify overseas expansionsFor instance, JA Solar, a leading photovoltaic module company, disclosed plans for its own Hong Kong listing in February 2025. The company has established a comprehensive sales and production network, with 13 overseas sales offices and a dedicated manufacturing base in Southeast Asia while holding a significant presence in the American market.

Since going public via a backdoor listing in 2019, JA Solar has raised 19.16 billion RMB through various financing roundsThe most recent fundraising activity occurred in 2023, where the firm issued convertible bonds generating 8.96 billion RMB aimed at scaling multiple projects.

Importantly, JA Solar is also broadening its financing avenues through infrastructure-based public REITs projectsWith around 24 billion RMB in liquid assets, the company continues to grow, though it faces rising financial costs due to increased borrowingThis has led to a notable uptick in its interest-bearing liabilities, rising from 12% at the end of 2023 to over 30% by the third quarter of 2024.

The question arises—will seeking financing through the Hong Kong Stock Exchange resolve the immediate capital needs of these companies?

Looking at the data, 2024 has seen Hong Kong host 71 new stock fundraising projects, totaling approximately HKD 87 billion, ranking the city fourth globally for such activitiesInterestingly, a significant portion of these new fundraising efforts occurred following the announcement of five supportive measures aimed at the Hong Kong market in April 2024—reinforcing Hong Kong's position as the go-to fundraising destination for mainland enterprises.

The frequent pivot towards H-share listings by renewable energy companies can be attributed to a dual motivationFirstly, amid market pressures, these firms need liquidity to maintain healthy growth and expansionSecondly, the increasingly stringent IPO and refinancing regulations on the A-share market make Hong Kong an attractive alternative due to its lower time commitments and higher probability of success for listings.

Given that renewable energy manufacturing is intrinsically capital-intensive, the ongoing downturn in market prices for lithium batteries and solar products heightens competitive pressures, steering many firms towards stockpiling resources for economic resilience.

Indeed, several renewable energy companies already operating within the A+H framework are seeing substantial activity, with precedents set by wind turbine manufacturers like Goldwind Technology and Dongfang Electric, as well as hydrogen energy firms like Yi Hua Tong and photovoltaic glass manufacturers like Fuyao Glass

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