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Yingli Solar plans Nasdaq offering

Cleaner energy needs may give power equipment maker's US$400m float attractive edge with investors, analysts say

Yingli Solar, a mainland solar power equipment maker, plans to raise about US$400 million from an initial public offering on the Nasdaq stock market by the end of this year or early next, market sources said.

The offering would be twice the size of Focus Media Holding's US$197 million sale last year, the largest mainland IPO to date on the Nasdaq.

'It'll be like a Suntech,' said a person familiar with the situation. Suntech Power Holdings, which also makes solar power equipment including photovoltaic cells and arrays, raised US$396 million in December last year from its listing on the New York Stock Exchange.

Suntech shares trade at 90 times last year's earnings, closing at US$27.97 on Wednesday in New York. Its shares have risen 46 per cent since listing. The benchmark Standard & Poor's 500 Index, which is up 2 per cent this year, closed on Wednesday at 1,270.91 points.

Fund managers said Yingli's offering would prove attractive to investors. 'Look at the performance of Suntech in terms of valuation and share performance,' said Louis Wong Wai-kip, a research director of Phillip Securities. 'It has garnered strong interest from the market because of the expected large demand for clean energy.'

Suntech originally planned to sell shares on the Nasdaq market but got poached by the NYSE, something that could happen with Yingli as well. The NYSE has been trying to attract larger-sized Nasdaq-bound deals after tough new rules and the fear of lawsuits deterred big state-owned enterprises from selling shares in the US.

The last mainland company to sell shares on the NYSE was Semiconductor Manufacturing International Corp which in March 2004 raised US$1.8 billion, according to Thomson Financial data.

The Nasdaq has seen only one mainland listing this year. China GrenTech Corp, which makes products for the wireless industry, raised US$113 million in March. The Nasdaq Composite Index is down 2.4 per cent this year, closing at 2,153.34 points on Wednesday.

Mainland solar companies such as Yingli are racing to raise funds so they can buy the high-grade silicon needed to make photovoltaic cells. Prices for a kilogram of the raw material of chips have jumped to as much as US$200 from as low as US$20 at the beginning of last year as demand outstrips supplies.

Yingli, which is based in Baoding, just outside Beijing, can make solar cells capable of producing 50 megawatts of power each year, about 33 per cent of Suntech's annual output.

Suntech, based in Jiangsu province, posted US$19.3 million in net income in the first quarter, almost double the figure in the same period last year. Sales more than doubled to US$90 million from US$39 million over the same period.

China's photovoltaic cell market reached 12 gigawatts of production capacity in 2004 and the industry is growing at an annual rate of 60 per cent.

The industry's revenue is expected to climb to US$9.9 billion by the end of the year, according to Suntech's listing prospectus.

TOP 10 CHINESE IPOS ON NASDAQ

Value (US$m)

July 04

July 05

Focus Media Holding

197

May 04

Shanda Interactive Entertainment

169

May 05

China Techfaith Wireless Communication Technology

142

March 00

AsiaInfo Holdings

138

Aug 05

Baidu.com

124

Dec 04

The9

119

March 06

China GrenTech Corp

113

Aug 05

China Medical Technologies

110

Dec 04

Ninetowns Digital World Trade Holdings

106

July 04

KongZhong Corp

100

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