Chinese wind energy giant pulls off stellar IPO

There were conflicting signals on the health of the clean tech IPO market this week, as one leading Chinese renewable energy firm postponed its planned flotation and another pulled off an encouraging first day of trading.

China Longyuan Power Group Corp, the largest wind farm developer in Asia, debuted on the Hong Kong Stock Exchange yesterday and saw its share price climb 9.44 per cent on its first day of trading.

The IPO was 235 times oversubscribed and the energy giant reportedly raised HK$17.14bn (£1.4bn) through the IPO, selling 2.1 billion shares at the upper end of the expected price range.

The shares started trading at HK$9.20, up 12.75 per cent on the IPO price, before climbing further to HK$8.93 at the end of the day's trading.

The company said the cash raised through the IPO would be used to repay debt and finance new production facilities.

In contrast, an underwriter for Chinese thin-film solar cell specialist Trony Solar Holdings announced on Wednesday that it had postponed its planned IPO indefinitely. Market conditions were blamed for the delay.

The company had planned to float on the New York Stock Exchange, raising about $240m (£147m) and selling shares for between $9 and $11.

Many Chinese solar energy firms have endured a volatile year as the solar panel market has struggled to cope with global oversupply caused by the recession. However, Trony has delivered an impressive financial performance, recently posting quarterly results showing sales were up 81 per cent year on year to $37m, while net income also rose 62 per cent.

The moves came as reports this week in the China Daily newspaper said that the country's energy strategy was predicting that renewable energy would provide a third of China's energy by 2050.

The paper cited a report from the government's Energy Research Institute, which predicted that renewables will grow rapidly over the coming decades, providing 15 per cent of the nation's energy by 2020 and 20 per cent by 2030, displacing one billion metric tonnes of coal.