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 three Gorges Corp. Unit climbed in Chinese trading of Thursday to as high as 3.82 yuan apiece in the Shanghai stock exchange, from its IPO price of 2.65 yuan.
The listing of the company, the biggest in China, has been eagerly awaited year. In May of 2017 it raised 22.7 billion yuan in a bid that was 78 times oversubscribed Three Gorges said that the proceeds from the offering would be used to replenish offshore wind power projects and fund liquidity.
The parent is the world's largest hydropower company, and the total assets of its renewables unit are valued at more than 140 billion yuan according to the company website.
The listing comes amid a concerted drive for renewable energy in Asia's largest economy. China's initiative to achieve peak emissions by 2030 and carbon neutrality by 2060 has fueled a surge in the installations of wind and solar capacity. Yet, the challenges in the wind sector include increasing domestic competition and the disappearance of subsidies that have helped accelerate the industry's growth.
The open reflects the investor appetite for positive energy stocks such as hydropower and wind power, which have a very new outlook, said Emperor Securities Research Director Stanley Chan by telephone. In the next decade, the social and environment stocks will be the main trend.
Three Gorges Renewables has just gone public following a spate of other energy companies that went public recently. Among them was Shanghai Electric Wind Power Group's 2.9 Billion Yuan offering last month. The stock is now trading 39% below its IPO price.
Three Gorges announced this week that it had completed China's first offshore wind project. While wind installations doubled in 2020 to a 20-year record, the focus has been on onshore projects.
Before trade said S&P Global Ratings that the listing of China Three Gorges Renewables was a positive outlook' on the company and that it is credit positive.
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