Xinjiang Goldwind Science & Technology Co., a Chinese wind-turbine maker, surged on its first day of trading in Hong Kong on speculation China’s efforts to encourage clean energy will spur earnings.
The shares climbed 9.2 percent to HK$19.64 at 11:06 a.m. local time, beating the 0.8 percent gain in the benchmark Hang Seng index. Goldwind shelved the sale on June 14, citing poor market conditions. The Hang Seng has since advanced 15 percent.
Goldwind, already listed on the smaller of mainland China’s two stock exchanges in Shenzhen, plans to use the sale proceeds to expand production capacity and become one of the world’s top three wind-turbine makers in five years. The net proceeds are about HK$6.8 billion ($877 million), the Urumqi, Xinjiang-based company said in a statement to the Hong Kong exchange yesterday.
“This company has a good market position in China and it’s benefitting from government policy encouraging the use of wind power,” said Dennis Lam, an analyst at DBS Vickers Hong Kong Ltd. “It’s a good-quality company. The market earlier this year in Hong Kong was affected by the financial crisis in Europe, so it’s no surprise that with the recovery the stock has been well received by investors.”
China, the world’s biggest polluter, may spend about 5 trillion yuan in the next decade developing cleaner sources of energy to reduce emissions from burning oil and coal. China erected more wind turbines in 2009 than any other country and may install a record 18 gigawatts of wind-power capacity this year, Bloomberg New Energy Finance estimates show.
Profit May Rise
The stock rose 3 percent to 19.83 yuan in Shenzhen trading, outpacing the 2.6 percent gain in the benchmark Shenzhen Composite Index.
Goldwind will likely increase consolidated profit by at least 26 percent to 2.2 billion yuan ($330 million) this year, the company said in June. Revenue totaled 10.7 billion yuan last year, with China accounting for 99 percent of sales. About 44 million yuan of revenue came from overseas.
Moody’s Investors Service put China’s debt rating on review for a possible upgrade today, spurring Chinese stocks. The ratings company cited the country’s growth outlook and its ability to absorb losses from last year’s surge in bank lending.