It is the world’s biggest maker of batteries for electric cars. It has plans to expand its business globally. And it is one of China’s most strategically important technology companies.
But when Contemporary Amperex Technology Ltd., or CATL, started selling shares for the first time in Hong Kong on Tuesday, surging 14 percent, American investors were largely shut out. It was the world’s biggest stock listing so far this year, according to the data provider Dealogic.
Tensions between China and the United States pushed CATL to ban U.S. onshore investors from its share sale, the first outside of the Chinese mainland, where it is listed in the city of Shenzhen.
The fact that some of the world’s most active investors were absent from one of the most anticipated trading debuts so far this year underscored the deepening rift between the United States and China.
CATL has found itself caught in the crossfire as Washington and Beijing have lobbed sanctions, blacklists and tariffs at each other. It was labeled a Chinese military company by the Pentagon. U.S. lawmakers called on its Wall Street bankers to back out of the Hong Kong listing. And it has been hit with tariffs on the batteries it makes.
The CATL Hong Kong stock sale marks a dramatic reversal from a decade ago when Alibaba, the Chinese e-commerce giant, elicited cheers from traders as it went public on the New York Stock Exchange in 2014. The company raised $21.8 billion, delivering a big payday for Wall Street banks and minting mom-and-pop investors.
“We are headed toward full financial decoupling with China,” said Stephen Roach, an economist and a former chairman of Morgan Stanley Asia based in Hong Kong. “Congress is driving the process of disengagement,” he said. The shares of Chinese companies that are traded in the United States could be the next thing to come under fire, he added.
The U.S. government has targeted Chinese companies as it moves to limit China from accessing American markets out of national security concerns, a policy that President Trump began in his first term and which President Joseph R. Biden Jr. continued.
Mr. Trump has accused China of exploiting American investors to finance its military, attempting to isolate China with colossal tariffs that were only suspended after global markets convulsed.
A Ford Motor battery project in Michigan that licenses CATL’s technology has drawn local and national political fire. Lawmakers in Congress have introduced legislation that would withdraw subsidies from U.S. companies that manufacture batteries using Chinese expertise.
Yet even as the battle between the two superpowers creates financial collateral damage, CATL raised $4.6 billion ahead of its secondary listing in Hong Kong, more than any other public listing this year. The stock was sold for $263 Hong Kong dollars a share, or about $33.62 U.S. dollars. Its biggest investors include Kuwait’s sovereign wealth fund, the Chinese firm Hillhouse Capital Management Group and Oaktree Capital Management, the American asset management firm.
CATL moved to hive off American investors ahead of the listing as tensions between the United States and China spiked. It said last week that it had changed the share sale to what is known as a Reg S offering, which prevents the sale of stock to onshore U.S. investors and exempts it from having to make certain regulatory filings in the United States.
The company did not explain why it changed the structure of its listing, but it has said that geopolitical tensions are among the risk factors to its business. “We face risks associated with changes in trade policies or tariff regulations,” it said in a regulatory filing.
In response to the Pentagon’s designation of the company as having both military and commercial technology, CATL said that it had “never engaged in any military-related businesses or activities” and had “proactively engaged with the Department of Defense to address the false designation.”
Most large American institutions will still be able to trade in CATL shares if they invest through offshore accounts. But that would still leave a hole. Some 10 percent of American investors would have probably invested in its stock if not prevented from doing so, said Victor Shih, a specialist in Chinese finance at the University of California, San Diego.
“I think that this is a major milestone,” said Mr. Shih, adding that it was likely the start of a broader trend. “This will apply to many Chinese hardware and even some software producers, thus cutting out U.S. investors from some potentially profitable opportunities.”
Jack Ewing contributed reporting from New York.
Alexandra Stevenson is the Shanghai bureau chief for The Times, reporting on China’s economy and society.
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