The strong post-IPO performance of China Longyuan Power Group Corp, the world's fifth-largest wind power generator, could herald a wave of public offerings from Asia's renewable energy sector. Longyuan shares have traded 33 percent above the offering price since listing in December last year.
Longyuan raised $2.2 billion, making it the largest wind power IPO in 2009. Xinjiang Goldwind's $1.5 billion IPO looms largest in the pipeline for 2010. "There are definitely more renewable energy IPOs in the making, given that this is what Beijing is seriously looking to grow," said one of the sources.
Goldwind, already listed in Shenzhen, the smaller of Mainland China's two stock exchanges, said in October last year that it planned to float shares in Hong Kong, with an eye toward expansion, but did not give financial details. Goldwind was seeking approval from the Chinese securities regulator in Beijing for a Hong Kong IPO, said the sources, who declined to be identified as they were not authorised to speak to the media.
CICC, partly owned by US investment banking giant Morgan Stanley, declined to comment. Other global investment banks, including UBS, were pitching to Goldwind in the hope that it would hire at least one more sponsor, said the sources.
Haitong Securities, one of China's 10 biggest brokerages, which helped Goldwind list in Shenzhen, was also expected to be appointed to handle part of the company's H-share offering, another of the sources said. Goldwind planned to issue no more than 15 percent of its enlarged equity capital in the Hong Kong offering, the sources said, with a 15 percent over-allotment option in case of strong demand.
Based on Monday's close of 28.53 yuan for Goldwind's Shenzhen-listed shares, its Hong Kong offering could raise up to 7.93 billion yuan ($1.2 billion). The first source added that CICC bankers had suggested that Goldwind should wait "for a while" until its Shenzhen-listed share price rose to a more attractive level, which would benefit pricing for the Hong Kong IPO. Goldwind also needs approval from its A-share investors for the Hong Kong IPO plan.