Investors energised by wind power

Canberra Times
01/01/2008 Page: 13

China's emphasis on global warming and its encouragement of wind energy and other sources of renewable energy have finally made itself felt among Chinese investors.

This was confirmed last week by the spectacular opening of a stockmarket listing by China's biggest maker of wind energy generating equipment. Shares in Xinjiang province based Goldwind Science & Technology soared 264 per cent from their initial public offer price to close at 131 yuan ($A20.55 ) in their first day of trade on the Shenzhen Stock Exchange, far exceeding analysts' forecasts of a range of $A14.10-$A15.65.

Smaller Chinese stocks routinely double in their debuts. Demand for Goldwind may have been boosted by a recent pull-back in the overall sharemarket, which has made Chinese investors see initial public offers as the safest path to quick profits. An energy analyst at United Securities in Shenzhen, Yang Jun, said,"The renewable energy theme is getting more popular." Mr Yang added that Goldwind's success and the support of China's Government for green energy could prompt more such firms to list.

The China-Belgium Direct Equity Investment Fund, run by Haitong-Fortis Private Equity Fund Management, a venture between China's Haitong Securities and Belgium's Fortis Fund Management, held 7.2 per cent of Goldwind before the offer, and has undertaken to hold its shares for at least three years. Goldwind, raised $A283 million by selling 10 per cent of its expanded share capital in the offer.

Oriental Securities estimated in a report that Goldwind's net profits might hit $A136 million this year, tip from an estimated $A98 trillion last year, though it also said the stock would start to look overvalued above $A18.80.

A spokesman for Haitong-Fortis said,"An increasing number of power firms in China are seeking to break out of the traditional generating methods into clean and green ways." Traders said Goldwind's debut helped to boost other power-related shares in China last week. Shares in Datang Power, a big generator which relies mainly on coal but is developing its wind energy capacity, surged 8.55 per cent to a two-month high of 18.79 yuan.

Experts from the Global Wind Energy Council said last year China was set to overshoot a 5 gigawatt target set for wind generation installed capacity in 2010 after it hit 2.6GW at the end of 2006. In the past, many of China's firths in high technology and clean energy have chosen to list overseas rather than in China in the hopes of finding more sympathetic investors abroad. Some analysts now feel that the strong demand for Goldwind's shares could encourage such firms to list domestically.