© Bloomberg. Photovoltaic modules stand at a solar power plant co-owned by Longi Green Energy Technology Co. and China Three Gorges Corp. in this aerial photograph taken in Tongchuan, Shaanxi Province, China, on Monday, July 20, 2020. Longi is the world’s largest producer of solar wafers and the world’s largest solar company by market value. Photographer: Qilai Shen/Bloomberg
(Bloomberg) — China Three Gorges Renewables Group Co. surged 44%, the daily limit, in its trading debut as investors sought to gain from the country’s push toward cleaner energy.
The unit of China Three Gorges Corp. saw its shares climb to as high as 3.82 yuan apiece on the Shanghai stock exchange in early trading Thursday, from its IPO price of 2.65 yuan.
The company’s listing, the year’s biggest in China, has been eagerly awaited. It raised 22.7 billion yuan ($3.6 billion) in a May offering that was 78 times oversubscribed. China Three Gorges said proceeds from the offering would be used to help fund offshore wind power projects and replenish liquidity.
The parent is the world’s largest hydropower company, and its renewables unit’s total assets are valued at more than 140 billion yuan, according to the company website.
The listing comes amid a concerted push for renewable energy in Asia’s largest economy. China’s aim to reach peak carbon emissions by 2030 and carbon neutrality by 2060 has fueled a surge in installations of wind and solar capacity. Still, challenges in the wind sector include rising domestic competition and the lapsing of subsides that have helped accelerate the industry’s growth.
“The open reflects the investor appetite that we are seeing for new energy stocks such as hydropower and wind power, which have a very positive outlook,” Emperor Securities research director Stanley Chan said by phone. “ESG, social and environment stocks will be the main trend for the next decade.”
China Three Gorges Renewables joins a spate of other energy companies going public recently. Among them was Shanghai Electric Wind Power Group’s 2.9 billion yuan offering last month. The stock is now trading 68% above its IPO price.
China Three Gorges announced this week that it had completed the construction of China’s first floating offshore wind project. While wind installations doubled to a record in 2020, the focus has been on onshore projects.
Prior to trading, S&P Global (NYSE:) Ratings said that the China Three Gorges Renewables listing supported a “stable outlook” on the company and that it is credit positive.
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