Key facts
- China Resources New Energy shares nearly tripled on their Shenzhen trading debut.
- The company raised 24.5 billion yuan ($3.61 billion) in its IPO, Asia's largest this year.
- The stock opened at 21.60 yuan, significantly higher than its IPO price of 10.11 yuan.
- The renewable energy firm's shares were up 144% to 24.7 yuan as of 0304 GMT.
- The IPO's performance contrasted with a nearly 2% decline in the blue-chip index.
China Resources New Energy shares nearly tripled in their Shenzhen trading debut on Thursday, following Asia's largest initial public offering of the year. The wind and solar power firm raised 24.5 billion yuan ($3.61 billion), with its stock opening at 21.60 yuan against an IPO price of 10.11 yuan. The shares surged as much as 198%, prompting a brief trading suspension, and were up 144% to 24.7 yuan as of 0304 GMT.
The strong debut for one of China's largest renewable power operators occurred despite a nearly 2% decline in the blue-chip index. This performance is seen as a test of efforts to attract major mainland listings and redirect household savings into the stock market after a period of IPO slowdown. The successful launch offers a confidence boost for issuers and investors ahead of a pipeline of significant share sales.
According to LSEG data, A-share IPOs raised $7.7 billion in the first half of the year, a 64.4% increase from the previous year. Overall IPO proceeds by Chinese companies, including offshore listings, nearly doubled to $16.2 billion. This revival in the IPO market could encourage more and larger deals, such as the planned 29.5 billion yuan Shanghai IPO by memory chip maker ChangXin Memory Technologies.
China Resources New Energy is controlled by Hong Kong-listed China Resources Power, which is part of the state-owned China Resources Group. The company focuses on investing in, building, and operating wind and solar farms across China. While China is the world's largest installer of renewable energy, industrial overcapacity has impacted share prices for some listed companies in the sector. However, China Resources New Energy, as an operator rather than a manufacturer, is considered more insulated from these issues. Analysts noted the company operates 4% of China's wind power and 1.2% of its solar assets.
The company's IPO is the largest on record for Shenzhen. Retail investors placed approximately 6.4 trillion yuan in orders for the online portion of the deal, making the retail tranche over 683 times covered. China Resources New Energy sold 2.11 billion shares, representing about 16.2% of its enlarged share capital, with the potential to rise to 2.42 billion shares if an over-allotment option is fully exercised. The proceeds will be used for investment in wind and solar projects. The IPO occurs as China aims to generate half of its electricity from non-fossil sources by 2030, despite challenges like falling power prices and grid limitations.