A subsidiary of a government-supported electricity generator, China Resources New Energy Holdings, has broken several records on the Shenzhen Stock Exchange, ahead of its anticipated status as the largest initial public offering (IPO) and the first "red-chip" firm listed on the exchange.
The wind and solar power A producer, established from China Resources Power, announced plans to secure 24.5 billion yuan (US$3.6 billion) through local currency shares on the Shenzhen Stock Exchange, according to a statement released on Thursday.
Should it succeed, China Resources New Energy will become the first company listed in Shenzhen that was established abroad but primarily operates within Mainland China under the... red-chip structure .
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The announcement follows significant economic shifts towards renewable power sources, with increasing petroleum costs driving up inflation rates and compressing company profits. The stock issuance is anticipated to strengthen China's partial separation from the oil crisis by increasing the proportion of renewable energy within overall energy usage.
China Resources New Energy planned to issue 2.1 billion shares via the Shenzhen Stock Exchange on June 22, with this portion accounting for between 16.2 percent and 18.2 percent of its expanded share capital, contingent upon whether the over-allotment option was utilized, as stated.
Revenue will support the building of several renewable energy initiatives totaling 40.4 billion yuan, such as a clean power hub and an eco-friendly sustainable development initiative.
Last year, wind energy contributed 82 percent of the company's overall electric generation, while solar covered the remaining portion, according to the firm.
The first-half profit of China Resources New Energy likely fell by up to 30 percent compared to the previous year, reaching 3.3 billion yuan, according to the report. This decline was attributed to adverse weather, increased expenses, and reduced operational efficiency.
The firm stated that it fulfilled the requirements for red-chip listings on Mainland China stock markets, having a market capitalization exceeding 20 billion yuan and generating revenues of no less than 3 billion yuan in the most recent fiscal year.
Stocks of the parent company China Resources Power fell by 1 percent to HK$19.47 in Hong Kong at the start of Thursday. The power generator stated in a notice submitted to the Hong Kong Stock Exchange that its ownership in the renewable energy division will decrease to approximately 80 percent following the share issue, down from the current 100 percent.
China Resources New Energy is anticipated to overtake Yihai Kerry Arawana Holdings, an edible oil company which earned 13.9 billion yuan in 2020, becoming the largest IPO on the Shenzhen Stock Exchange.
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