An institutional investor placed 113 million China Resources Power shares, or about 3 per cent of the company's share capital, at HK$8 each, near the top end of an indicative price range of between HK$7.80 and HK$8.20, a source close to the deal said.

The placement was four times covered, leaving the institutional investor without any more China Resources Power shares, the source said. CLSA was the arranger for the deal.

'The share placement was a catalyst to trigger China Resources Power's drop, while all mainland power companies are having a share price consolidation,' said Simon Lam Ka-hang, a research director at Christfund Securities.

Shares of mainland power companies have gained between 13 per cent and 22 per cent over the past month amid speculation that China would lift electricity tariffs.

However, investors' profit-taking activities yesterday sent these stocks falling with China Power International Development - one of the country's largest independent power producers - suffering the most. The company, headed by former premier Li Peng's daughter, Li Xiaolin, dropped 3.24 per cent to HK$3.28.

Datang International Power Generation, the largest power producer in the Beijing-Tianjin-Datang region, fell 1.95 per cent to HK$6.02.

Huaneng Power International, China's largest listed electricity producer, dropped 1.69 per cent to HK$5.82, while Huadian Power International Corp closed 1.3 per cent lower at HK$2.28.

China Resources Power, held by state-owned China Resources Group, has been increasing its presence in the power sector in a bid to compete with its rivals.

In previously agreed deals, the company will buy controlling stakes in two power plants from its parent firm for HK$555.7 million, including its first hydro-power project.

China Resources Power's earnings will drop 21.22 per cent year on year to HK$2.25 billion this year, according to Thomson Financial's estimate.