In recent years, Contemporary Amperex Technology Co., Limited (CATL) has continuously engaged in large-scale financing, accelerating cash reserves and debt repayment through methods such as its Hong Kong IPO and bond issuances. The company's cash holdings have steadily risen, with up to 80 billion yuan allocated for wealth management products.

Half a year after its Hong Kong IPO, CATL announced plans to issue 10 billion yuan in bonds. On December 10, CATL (300750.SZ) disclosed its intention to register and issue bonds not exceeding 10 billion yuan, with proceeds earmarked for project construction, working capital replenishment, and repayment of interest-bearing debt. The bonds will have a maturity of no more than five years. The board also proposed authorizing the general manager to oversee the issuance process. This marks another significant financing move following its Hong Kong IPO, which raised 35.66 billion HKD earlier this year.

In its April 2025 tracking rating report, United Ratings noted that CATL faces substantial capital expenditure needs and potential risks related to capacity absorption due to its large-scale ongoing projects. By the end of 2024, CATL's planned investment in ongoing projects totaled 333.942 billion yuan. The company's high capital expenditure requirements and the time needed for project completion pose risks if downstream demand falls short or competition intensifies. United Ratings assigned CATL an "AAA" issuer rating.

Public data shows CATL's debt ratio has been declining. Wind data indicates that CATL's debt-to-asset ratio dropped from 69.9% at the end of 2021 to 65.24% by the end of 2024, further decreasing to 61.27% by September this year. This sustained reduction provides room for bond financing.

Many analysts remain bullish on CATL. For instance, analysts from BOCOM International, Li Liuxiao and Chen Qing, set a target price of 458.75 yuan for CATL's A-shares in an October 21 report, suggesting an 18.7% upside from current levels.

Despite its ample cash reserves, CATL continues to raise funds. Its cash holdings grew from 89.1 billion yuan at the end of 2021 to 303.5 billion yuan by the end of 2024. Thanks to its Hong Kong IPO proceeds, cash reserves reached 324.2 billion yuan (consolidated) by September. United Ratings data also shows CATL had 344.1 billion yuan in unused credit lines by the end of 2024, indicating significant room for additional bank loans.

Notably, CATL has allocated substantial idle funds to wealth management. In late July, its board approved increasing entrusted wealth management limits by up to 40 billion yuan, bringing the total annual quota to 80 billion yuan.

CATL acknowledged in a filing that its cash reserves stood at 350.578 billion yuan as of June 2025, describing them as "relatively ample." This has led some investors to question the necessity of the bond issuance. Online forums feature queries such as, "With over 300 billion in cash sitting in banks, why issue 10 billion in bonds?"

Supported by sustained earnings growth and increased dividends, CATL's A-shares have surged 50% this year, making it the fourth-largest company by market cap in the A-share market, trailing only Agricultural Bank of China, ICBC, and China Construction Bank. Currently trading at a TTM P/E of 27.8x, CATL is poised to benefit from the expansion of the new energy vehicle sector—particularly electric trucks—and robust energy storage demand, potentially driving its stock to new highs.

(Mentioned stocks are for illustrative purposes only and do not constitute investment advice.)