Huaneng Renewables powerless on debut
Huaneng Renewables Corp, which focuses on wind farm development, saw its shares drop up to 11.2 per cent on debut yesterday amid poor sentiment in the renewable energy sector.
The loss was pared to 2.8 per cent by the market close, with the shares ending at HK$2.43, compared with their issue price of HK$2.50.
Rivals China Longyuan Power Group Corp fell 3 per cent to HK$7.72 and China Datang Corp Renewable Power slid 0.99 per cent to HK$2.01. The Hang Seng Index closed 0.84 per cent lower.
Analysts attributed the poor performance to a weakening market and a general lack of interest in renewable energy stocks.
'There isn't any news in the wind sector. I think the weakness has mostly to do with general bad sentiment in equities,' said Pierre Lau, Citi's head of regional utilities research.
Lau said news this week that Beijing had agreed to drop subsidies to wind turbine makers that used domestically made components instead of imports had no direct impact on wind farm operators.
Concerns about power grid bottlenecks and wind farms' grid connection drop-outs were also not new, he said.
Sanford C. Bernstein Securities utilities sector senior analyst Michael Parker said the poor performance of solar sector stocks had also spilled over to the wind segment.
'It's been a tough week for renewables globally,' Parker said, adding solar shares were hit by continued concerns over falling subsidies to solar panel installation in Europe, the world's largest solar power market.
Leading market Germany on Monday passed legislation under which the government will maintain a system of cutting solar subsidies by more than 9 per cent annually. Further cuts were envisioned depending on the new generation capacity installed, Dow Jones reported.
GCL Poly Energy Holdings, the world's largest maker of the wafers used in solar power panels, saw its shares drop 7.2 per cent to HK$3.23.