EVE's Hong Kong stock IPO fundraising abandons Malaysia, betting on the Hungarian factory to target European car manufacturers

Following the listing of Contemporary Amperex Technology Co., Limited (CATL) on the Hong Kong Stock Exchange and the creation of a new market value high of 2 trillion yuan, the "second brother" of energy storage, EVE Energy Co., Ltd. (300014.SZ), has also initiated its Hong Kong IPO agenda to fuel its global expansion. On January 2, EVE Energy updated its Hong Kong prospectus, but there was a change in the core content regarding the use of funds, with the originally planned investment in the Malaysian production base being canceled and the focus shifted to the Hungary project. European Factory, Located Next to BMW According to Sing Tao Global Network, as a crucial part of EVE Energy's expansion into European customers, the Hungary project is set to start in June 2024, with a total investment of approximately 10 billion yuan and covering an area of 450,000 square meters, located right next to the BMW factory. The prospectus reveals that EVE Energy has obtained land use rights for the Hungary base and has begun construction, with production expected to commence in 2027, planning a production capacity of 30GWh, focusing on the production of 46 series large cylindrical power batteries. Large cylindrical batteries are considered one of the important technological routes for power batteries and are favored by overseas car manufacturers such as Tesla and BMW. In contrast, square batteries are the solution adopted by mainstream Chinese electric vehicle companies like BYD and GAC. As a pioneer in large cylindrical batteries in China, EVE Energy's fundraising aims to enhance the Hungary factory to deeply bind European automotive customers through localized supply and avoid potential trade barriers such as the EU carbon tariff. Previously, EVE Energy had invested in building a battery production base in Malaysia, covering a full range of products including consumer batteries, power batteries, and energy storage batteries, with plans to complete construction and achieve delivery by 2025. In the first version of the prospectus six months ago, EVE Energy also planned to allocate part of the fundraising to the third phase of the Malaysian base. Regarding the specific reasons for canceling the Malaysian project in this fundraising plan, Sing Tao has sent a letter to EVE Energy but has not received a response as of the time of publication. However, according to the "2025 Hungary Foreign Investment Cooperation Country (Region) Guide" released by the Ministry of Commerce, Hungary has a superior geographical location, complete infrastructure, and a friendly investment environment. Its "Eastward Opening" policy is deeply aligned with China's "Belt and Road" initiative, focusing on encouraging investment in areas including new energy vehicles, power batteries, digital economy, green energy, and high-end manufacturing, indicating significant cooperation potential and making it an optimal destination for Chinese enterprises to layout in Europe. Additionally, the China-Hungary co-built Central European Trade and Logistics Cooperation Park and the Bosch Economic and Trade Cooperation Zone have become benchmarks for cooperation between the two sides, with major projects such as CATL's power battery factory and BYD's automotive production base taking root in Hungary. The two countries have also signed multiple cooperation agreements, with ongoing deepening cooperation in areas such as railways, digital economy, and green development under the "Belt and Road" framework, and financial cooperation continuously upgrading, with Chinese banks establishing branches in Hungary to provide diversified financial services. Crazy Financing Supports Expansion The shift in the use of funds for EVE Energy's fundraising is also related to the significant financial pressure brought about by its continuous large-scale expansion in recent years. From a financial perspective, in the past three years, EVE Energy has successively launched several major asset new projects, including the Shenyang project, phases one and two of the Malaysian project, the Chengdu solid-state battery project, the Hungary project, the Huizhou sodium energy headquarters, and the Jinyuan Robotics Center, requiring substantial new financing each year to cover the cash outflow caused by the expansion As of the end of the third quarter of 2025, EVE's interest-bearing loans reached 27.8 billion yuan, of which 5.2 billion yuan will mature within one year, while the company's cash balance is only 8.8 billion yuan. The financial leverage ratio increased from 62.3% at the end of 2024 to 65.7% at the end of September 2025, corresponding to a debt-to-asset ratio that rose from 59.4% to 63.5%, indicating further increased leverage. In terms of operations, EVE's revenue growth stagnated from 2022 to 2024, but rebounded significantly in the first three quarters of 2025 to 45 billion yuan, a year-on-year increase of 32.2%; however, the corresponding net profit attributable to the parent company was 2.8 billion yuan, a year-on-year decrease of 11.7%. EVE explained in its prospectus that the decline in profit was mainly due to share incentives (876 million yuan) leading to a significant increase in management expenses. Founded in 2001, EVE was among the first to be listed on the Shenzhen Stock Exchange's Growth Enterprise Market in 2009. After more than 20 years of development, it has become a global player in the all-scenario lithium battery industry. Its existing factories are located in Huizhou, Guangdong; Jingmen and Wuhan, Hubei; Chengdu, Sichuan; Yuxi and Qujing, Yunnan; Qidong, Jiangsu; Ningbo, Zhejiang; Shenyang, Liaoning; Hungary; Malaysia; and the United States. In the energy storage battery sector, EVE's global market share ranks second only to CATL; in the power battery sector, EVE ranks fifth in China. As of 10:00 AM on January 7, EVE's stock rose by 1.51%, trading at 70.65 yuan per share, with a total market capitalization of 146.537 billion yuan. Reported by Qu Hui, Sing Tao Global Network, Guangzhou