CHINA’S biggest producer of wind power, China Longyuan Power, is in essence a staid regulated utility. It buys turbines, erects them and sells the electricity they generate to China’s power distributors at prices fixed by the state. So why is its initial public offering next week on the Hong Kong Stock Exchange generating such excitement?
The offering is likely to value the firm, the former research arm of the ministry of energy, at nearly 30 times next year’s projected profits. Despite this heady figure, the tranche of shares being marketed to institutional investors is over eight times oversubscribed; the one for individuals, almost 30 times. The firm plans to sell 30% of its shares, but could, if it wanted, offload far more.
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