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China National Nuclear Power aims to raise 16.2 billion yuan in flotation

CNNP's Shanghai IPO could be mainland's biggest since 2010, with funds for 4 projects

PUBLISHED : Tuesday, 06 May, 2014, 12:42am
UPDATED : Tuesday, 06 May, 2014, 12:42am

China National Nuclear Power (CNNP) - the main subsidiary of China National Nuclear Corp (CNNC), one of the mainland's three state-owned nuclear power developers - aims to raise at least 16.25 billion yuan (HK$20.17 billion) in the first initial public offering in the mainland's nuclear sector.

In a preliminary listing prospectus posted on the China Securities Regulatory Commission's website on Sunday, CNNP said it planned to issue up to 3.65 billion shares - a quarter of its total issued shares - at a yet-to-be-determined price.

It plans to use some of the listing proceeds to fund four projects, with 2.7 billion yuan set aside for a 4.32 gigawatt project in Fuqing, Fujian; 1.4 billion yuan for a 2.5GW project in Sanmen, Zhejiang; 1.15 billion yuan for a 1.3 GW project in Changjiang, Hainan; and 3.9 billion yuan for a 2.25GW project in Tianwan, Jiangsu. Some seven billion yuan will be used as working capital.

CNNP's Shanghai stock market listing could be the biggest on the mainland since Agricultural Bank of China debuted in July 2010, although Guotai Junan Securities has also applied for a listing worth nearly 22 billion yuan, according to Reuters.

CNNP has 12 nuclear power projects, including operating ones in Zhejiang and Jiangsu and ones under construction or planning in Fujian, Hainan, Liaoning, Zhejiang, Hunan and Henan.

It controlled 6.51GW of operating nuclear power generating capacity at the end of last year, and had 12.53GW of projects under construction in Fujian, Zhejiang, Hainan and Jiangsu that are expected to come on stream between this year and 2018.

Its net profit rose 18.3 per cent to 2.48 billion yuan last year, as revenues grew 1.9 per cent to 1.81 billion yuan. It said net profit will be affected this year by the cessation of a profit tax reduction it enjoyed last year.

Fuel costs accounted for about 17 per cent of CNNP's total operating costs between 2011 and last year.

Beijing lifted a freeze on new nuclear projects in late 2012 after a 19-month ban on approvals imposed in the wake of Japan's Fukushima nuclear disaster in 2011. It raised safety standards, increasing the cost of new projects, and banned construction of reactors in inland provinces until the end of next year.

CNNP cautioned investors that the nuclear plant it is building in Sanmen, Zhejiang - the first in the world using US-based Westinghouse's third-generation AP1000 technology - was facing various challenges in terms of construction progress and investment control due to factors relating to design and key equipment manufacturing.

The mainland was the world's sixth-largest nuclear power generator in 2012, according to the World Nuclear Association, but has the world's largest expansion programme in terms of capacity under construction.

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