CATL expands green energy footprint with 45% stake in Hangzhou Zhonhen Electric

Contemporary Amperex Technology Ltd, or CATL, plans to buy a 45 per cent stake in the parent of a Shenzhen-listed renewable-energy company, as the world’s biggest maker of lithium-ion batteries for electric vehicles seeks to expand its investments in green energy amid the global oil shock. CATL signed a framework agreement with two shareholders of Hangzhou Zhonhen Technology Investment on Wednesday, agreeing to pay 4.09 billion yuan (US$598.5 million) for the deal, Hangzhou Zhonhen Electric, the listed subsidiary of the acquired company, said in a statement to the Shenzhen exchange. CATL would pay about 2.9 billion yuan in cash for the acquisition and the rest would be funded by a 99.7 per cent stake in one of its tech units in Shenzhen, the statement said. CATL and Zhonhen Electric would collaborate in the fields of green information and communications technology (ICT) infrastructure, transport electrification and smart power systems, the statement said. Shares of Zhonhen Electric surged 10 per cent to 31.93 yuan on Thursday. CATL rose 0.3 per cent to 389.99 yuan in Shenzhen and its Hong Kong-listed stock fell 1 per cent to HK$633. CATL has been expanding its business scope as China steps up efforts to boost usage of renewable energy. Chairman Robin Zeng Yuqun said last month that the southeast Fujian province-based company would ramp up spending on research and development to build a comprehensive industrial ecosystem from upstream mining to downstream applications and recycling. Net income for CATL surged 42 per cent from a year ago to 72.2 billion yuan in 2025 as the company sold more lithium batteries and diversified into the new-energy storage business. The company held 39 per cent of the world’s power battery market last year, according to SNE Research. As part of the latest deal, CATL would be entitled to appoint one board director and one general manager of the listed company, the exchange statement said. The acquisition was expected to be completed two months after the signing of the framework agreement, it said. Zhonhen Electric, which was founded in 1996 and started trading on the Shenzhen exchange in 2010, focuses on power-grid automation and power integrated solutions. Its clients include State Grid, China Mobile, Tencent Holdings and Alibaba Group Holding, according to its website. Alibaba owns the South China Morning Post. Zhu Guoding and his wife Bao Xiaoru control a combined 41.4 per cent of the listed company through direct shareholdings and via Zhonhen Technology. Parent company Zhonhen Technology, a privately-held one, has a registered capital of 15 million yuan. Zhu has a 70 per cent stake in it and Bao holds the remaining 30 per cent.