Caixin
Jan 07, 2020 08:00 PM
BUSINESS & TECH

Offshore Wind Turbine Giant Eyes Tech Board IPO

As of Sept. 30, Shanghai Electric Power had net assets of 3.74 billion yuan.
As of Sept. 30, Shanghai Electric Power had net assets of 3.74 billion yuan.

China’s largest offshore wind turbine maker is planning to go public on the country’s STAR Market, according to a filing released by its parent company Shanghai Electric on Tuesday.

Shanghai Electric Power Generation Group, a unit of state-owned conglomerate Shanghai Electric Group Co. Ltd., is one of the country’s seven offshore wind turbine producers. It specializes in manufacturing equipment and setting up power stations.

According to the filling (link in Chinese), Shanghai Electric Power will separate from its parent company and seek an IPO on the STAR Market — Shanghai’s Nasdaq-style tech board — joining three other wind turbine manufacturers listed around the country. As much as 40% of the company would be offered at a price of 1 yuan (14 U.S. cents) per share while more than half would be held by Shanghai Electric Group, making it the controlling shareholder. The takings would be used to upgrade facilities and to research new manufacturing technologies.

The company made a net profit of about 101 million yuan in the first nine months of 2019. It was responsible for 726,000 kilowatts, or 43.9% of the country’s total offshore wind power installation in 2018. However, it lost 52 million yuan in 2017.

It is hoped the breakup will promote the Shanghai Electric Power brand in the wind power sector, broaden the company’s financing sources and lower its capital costs.

China, the world’s largest wind power market, installed 1.6 gigawatts (GW) of offshore wind farms and 20.2 GW of onshore wind energy in 2018, bringing its total wind power capacity to 184.26 GW by the end of that year. The country is aiming to have 250 GW of wind energy capacity by the end of 2020, after Beijing set a target of producing 15% of energy production from renewable sources for the year.

For Shanghai Electric Power, an IPO is not yet assured as its listing application requires the approval of the company’s board and the Hong Kong Stock Exchange, on which the parent company is listed. As of Sept. 30, Shanghai Electric Power had net assets of 3.74 billion yuan.

Contact reporter Yutong Lu (yutonglu@caixin.com)

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