CNNP share of­fer ap­proved by CSRC

China Daily (Canada) - - FRONT PAGE - By LYUCHANG and LI XIANG

China Na­tional Nu­clear Power Co, one of the coun­try’s three State-owned nu­clear power de­vel­op­ers, is a step closer to rais­ing more than 16 bil­lion yuan ($2.6 bil­lion) in an ini­tial public of­fer­ing.

Plan by the nu­clear power com­pany, a sub­sidiary of China Na­tional Nu­clear Corp, to sell up to 3.65 bil­lion shares was ap­proved on Wed­nes­day by the China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion, the coun­try’s se­cu­ri­ties reg­u­la­tory body.

About9.2 bil­lionyuanof the funds will be used in build­ing and op­er­at­ing 10 coastal nu­clear power sta­tions in Jiangsu, Zhe­jiang, Fu­jian and Hainan prov­inces, with the rest used as work­ing cap­i­tal as it ex­pands, said of­fi­cials.

The com­pany first filed its IPO ap­pli­ca­tion to the se­cu­ri­ties au­thor­i­ties in 2012, but the re­quest was shelved as China tight­ened its grip on large-cap stock flota­tions worth over 5 bil­lion yuan.

Ex­perts said the lon­gawaited public of­fer­ing of shares in a nu­clear-fo­cused com­pany has gen­er­ated a lot of in­ter­est, but in­vestors are also be­ing ad­vised to be cau­tious about the is­sue, which is ex­pected to be­come the largest A-share floata­tion in four years.

Li Dax­iao, chief econ­o­mist at Yingda Se­cu­ri­ties Co Ltd, said that an up­com­ing wave of list­ings is likely to have a neg­a­tive im­pact on the mar­ket, and that cur­rent val­u­a­tions have not fac­tored in this “IPO ef­fect”.

Li said that it seems in­vestors are not fully pre­pared for what could be­come a huge amount of new shares flood­ing the­mar­ket, as the coun­try pushes to­ward a reg­is­tra­tionbased sys­tem for new of­fer­ings, which will no longer re­quire gov­ern­ment ap­proval.

“Given the cur­rent mar­ket frenzy, prices of new shares could soar on the day they de­but. But the risk is also grow­ing that the val­u­a­tions of some com­pa­nies have risen too high,” he said.

Con­ven­tional mar­ket wis­dom is that a wave of IPOs, es­pe­cially of large-caps, would cause a decline in the mar­ket as they drain liq­uid­ity.

Oth­ers, how­ever, are en­thu­si­as­tic that the nu­clear di­vest­ment, in a key high­tech sec­tor, will be looked on fa­vor­ably as of­fer­ing high growth po­ten­tial.

China ha­sun­veiled plans to build more nu­clear power plants as part of its ef­forts to in­crease non-fos­sil fuel sources of en­ergy.

The coun­try is ex­pected to raise in­stalled nu­clear ca­pac­ity from 14.6 gi­gawatts in 2013 to 50 GW by the end of 2017. Among all types of clean en­ergy, how­ever, so­lar power is ex­pected to see the most rapid growth.

CNNP is not the only up­com­ing en­ergy op­por­tu­nity which could tempt in­vestors to cash in on the huge growth prospects for the sec­tor.

ast year CGN Power Co Ltd, China’s largest nu­clear plant op­er­a­tor in terms of in­stalled ca­pac­ity, launched an IPO worth $3.2 bil­lion, which made it Hong Kong’s largest in 2014. Con­tact the writ­ers at lvchang@chi­nadaily.com.cn and lix­i­ang@ chi­nadaily.com.cn

DA WEI / FOR CHINA DAILY

A China Na­tional Nu­clear Corp stand at an industrial expo in Bei­jing. China Na­tional Nu­clear Power Co, a CNNC sub­sidiary, was given ap­proval on Wed­nes­day to launch an ini­tial public of­fer­ing.

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