China Energy and China Ground to boost mainland sales after stake deal
State-owned China Energy Conservation and Environmental Protection, which bought 29.2 per cent of China Ground Source Energy last month, says it will use its customer network to help the building heating system provider boost sales on the mainland.
"Our taking control of China Ground is a strategic move to tap into its know-how and complete our industry supply chain," said China Energy Conservation deputy chairman Chen Jinen.
He would not be drawn on whether his firm would inject its new and renewable energy assets into China Ground to broaden the scope of its renewable energy business.
China Energy Conservation bought 850 million new shares issued by China Ground at 41 HK cents each late last month. Shares in China Ground fell 1.25 per cent to 39.5 HK cents yesterday. They have risen 59 per cent this year, compared with a 9 per cent gain in the Hang Seng Index.
China Ground installs ground source heat pumps - central heating and cooling systems that pump heat to or from the ground.
Unlike traditional geothermal power-generating systems, which use heat from the centre of the earth to generate electricity, ground source heat pumps use the differences between temperatures a few metres below ground and buildings' indoor air temperatures to create heating and cooling effects.
Such heat exchanges are more efficient than heat pumps that exploit differences between indoor and outdoor air temperatures for heating and cooling, and conventional electrical air-conditioning and heating systems.
China Ground will use the HK$347.5 million proceeds from the share sale on heat pump projects in Dalian and Beijing. Chief executive Xu Shengheng said the company aimed to reap returns of 20 per cent on the projects.