CATL shares rocked as third-largest shareholder cuts stake, adds to US pressure

CATL experienced a sharp decline in its shares after the company announced that its co-founder would be selling off 1% of his holdings. 

The shares of Contemporary Amperex Technology Co. (CATL) fell very quickly when it was revealed by the company that its third-largest shareholder, co-founder, and vice chairman, Huang Shilin, plans to sell around 1% of his holdings to institutional investors. 

Between the ongoing U.S.-China tensions and the competitiveness of the Chinese battery industry, companies like CATL are looking for ways to ease the pressure. 

CATL shares decline 

The filing clarifies that the sale will not happen on the open market, which reduces its effect on the share price, but that has not stopped investors from being concerned.

On the Shenzhen A-share market, CATL’s stock slid by as much as 5.4%, while its Hong Kong-listed shares also fell. 

Notably, CATL’s cornerstone investors who have had their shares locked up will be free to sell their shares from November 19. This means about 77.5 million cornerstone shares will be freed up. 

Optimistic analysts are choosing to see the drop in stock prices as a buying opportunity. According to a trading memo from Changjiang Securities, CATL’s lithium demand could grow by up to 30% in 2026. 

In 2024, CATL reported its first-ever annual revenue decline, with revenue estimated to have dropped between 8.7% and 11.2%. But despite that, its net profit grew by 15% to around 50.7 billion yuan. 

Though impressive, the profit growth is the slowest CATL has seen since 2019. To strengthen its share price, the company initiated a share buyback and spent about RMB 254 million to repurchase just over a million shares. 

Political risks persist

To further complicate the matter, U.S. House Republicans are attempting to get the Commerce Department to restrict imports of solar and grid-related components made in China; these include battery inverters, which Republican lawmakers reportedly flagged in a letter, describing them as potential “grid-security risks.” 

Morgan Stanley analysts have pointed out that this could affect investor enthusiasm for Chinese companies in the energy storage sector by reducing demand for companies like CATL.

In earlier reports, U.S. energy officials allegedly found “undocumented communication devices” in Chinese-made inverters, which raised fears of unknowingly allowing foreigners to have remote access to sensitive information or allowing backdoor vulnerabilities to be exploited. 

CATL is building up its energy-storage business and has plans to raise capital via a Hong Kong listing, with regulatory approval secured to issue up to 220 million shares. The IPO could help the firm fund its expansion into new production and R&D projects, particularly in EV and grid-scale battery systems.