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Longyuan Slumps Most Since IPO as Profit Falls: Hong Kong Mover

March 18 (Bloomberg) -- China Longyuan Power Group Corp., the nation’s biggest wind-farm developer, fell the most in Hong Kong trading since its 2009 initial public offering after last year’s profit declined.

Shares tumbled as much as 16 percent, the biggest decrease since Dec. 10, 2009, to HK$7.72 and were at HK$7.82 as of the noon trading break. The benchmark Hang Seng Index rose 0.5 percent.

The company said yesterday 2013 profit fell 21 percent to 2.05 billion yuan ($331 million) from a year ago as higher expenses countered sales growth. The mean of 20 analyst estimates, compiled by Bloomberg, was 2.99 billion yuan.

The decline in profit is “mainly due to provisions for an impairment loss on its biomass projects,” said Kevin Zhao, a Shanghai-based analyst at UOB Kay Hian Investment Consulting. In addition, Longyuan’s income from government grants decreased, he said.

The company made a provision for 492 million yuan for two biomass units.

Beijing-based Longyuan added 1.3 gigawatts of wind power last year, bringing its total installed capacity to 14 gigawatts.

To contact Bloomberg News staff for this story: Feifei Shen in Beijing at fshen11@bloomberg.net

To contact Bloomberg News staff for this story: Feifei Shen in Beijing at fshen11@bloomberg.net

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