Domestic

Datang Renewable raises $643m in HK IPO

(Agencies)
Updated: 2010-12-13 15:01

HONG KONG - China Datang Corp Renewable Power Co, the nation's second-biggest wind-power producer by capacity, raised $643 million selling shares in Hong Kong at the bottom of its range, as investors shun renewable energy companies, Bloomberg News reported Monday.

The unit of China Datang Corp sold 2.14 billion shares at HK$2.33 ($0.3) apiece, after offering them at HK$2.33 to HK$3.18 each, according to two people with knowledge of the initial public offering (IPO), who declined to be identified before an announcement, the report said.

"Wind power is seen as being too reliant on support from China's government," said Francis Lun, general manager of Fulbright Securities Ltd in Hong Kong. "I don't think there's much appetite for wind power companies in Hong Kong as we already have two listed here," Lun said.

Related readings:  Datang Renewable Power sees strong capacity growth  Investors to snap up stakes in Datang unit  CNOOC signs Australian CSG energy accord  New-energy cars take off in China with government support

Datang Renewable is seeking to post a profit of at least 405 million yuan ($61 million) this year, compared with 366.9 million yuan in 2009, according to the initial public offering (IPO) prospectus. Datang's shares were sold at 13.1 times price-to-earnings estimates for 2011.

The proceeds of Datang's share sale will be used to expand its wind-power generating capacity and pay bank loans, the prospectus shows.

In addition, Rival Huaneng Renewables Corp, a unit of? China Huaneng Group Corp, canceled its IPO, the report said.

China wants at least 15 percent of its energy to come from renewable sources including wind by 2020. The worl's biggest polluter erected more wind turbines in 2009 than any other country and may install a record 18,000 megawatts of wind-power capacity this year, according to Bloomberg's estimation.