Chinese Wind Developer IPO Raises $800M, Raises Hopes

Chinese wind developer Huaneng Renewables (HKG:0958) completed a successful IPO last week in Hong Kong, raising about HKD 6.2 billion (US$800 million), and raising hopes for better market conditions for cleantech companies that want to go public.

The company is the wind-power arm of China Huaneng Group, China’s largest electricity producer.

In 2010, Huaneng Renewables had 3.5 GW of wind capacity installed and posted $94 million (RMB 609.4 million) in profits. It’s got 1.2 GW of wind under construction and about 73 GW in the pipeline.

The company plans to have 20,000 MW of wind capacity by the end of the decade – about 10% of its parent’s total estimated generating capacity.  

Huaneng sold 2.49 billion shares at HKD 2.50 per share, in the mid range of the $2.28-2.98 stated in its prospectus.

The share price equates to about 14.2 times the company’s 2011 earnings forecast. 

Lst year, investors paid a lower earnings multiple for wind company Xinjiang Goldwind’s $1 billion IPO, but a higher multiple for China Datang when it raised $643 million.

In December 2009, China Longyuan Power Group raised $2.2 billion in its Hong Kong IPO.

Huaneng cancelled a planned $1.3 billion IPO six months ago becuase of unfavorable market conditions.  Since then, there have been several successful cleantech IPOs, including Solazyme (Nasdaq: SZYM), Gevo (Nasdaq: GEVO), and Amyris (Nasdaq: AMRS).

But those are all US biofuels companies, and shares of Chinese wind companies have not fared as well over the same period.

Cleantech investors are hopeful this successful wind IPO indicates global market conditions are improving for companies that want to go public. In particular, they see it as a signal that conditions are improving for the beleaguered wind industry, partly driven by the Japanese nuclear meltdown. 

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