New | Everbright to spin off Greentech unit via a Hong Kong IPO
“People were initially concerned that the green technology business in solar and wind projects will require a lot of investment and as a result cause very volatile returns,” said UOB Kay Hian’s strategist Hannah Li. “But the plans were already mostly priced in by the market previously, while the decision to spin off the greentech business may actually help improve Everbright International’s valuations in the medium to long term.”
Everbright International’s core businesses in environmental protection and waste treatment are actually viewed quite positively, Li said.
The plans were already mostly priced in by the market previously, while the decision to spin off the greentech business may actually help improve Everbright International’s valuation in the medium to long term
Everbright’s chief executive Chen Xiaoping had said in February that the company had decided to delay the timing of the IPO of its greentech operations from late last year so that “both existing and new shareholders will have a chance to appreciate the 2016 results and the prospect of the 2017 operations.”
The business is expected to benefit from Chinese policies to fight environmental degradation.
The company posted a better than expected 33 per cent rise in annual profit and raised its dividend payout. It obtained 44 new projects worth 14.4 billion yuan last year - both historical records.
Net profit rose for the eighth year in 2016, advancing 33.6 per cent to HK$2.78 billion.
Everbright’s shares fell as much as 2.6 per cent amid a declining market following the company’s spin-off announcement, the biggest intraday decline in four months, before paring its losses to 1.5 per cent to HK$10.72.
