Sinovel targets 9.5b yuan in share offering
Sinovel Wind (Group), a mainland wind turbine maker, looks to raise up to 9.5 billion yuan (HK$11.17 million) on the Shanghai Stock Exchange in a sizeable public offering seen as a test for the mainland market's appetite after a disastrous year.
The first major offering on the Shanghai exchange after the key index lost 14.3 per cent last year, the world's third worst, would open the floodgates for initial public offerings if it proved successful, analysts said.
The turbine maker plans to sell 105.1 million shares at between 80 and 90 yuan each, representing 43.4 to 48.8 times the company's earnings in 2009. That price-earnings multiple nearly doubles the average ratio of 22 on the Shanghai market and makes Sinovel the most expensive share offering in Shanghai.
'The IPO reflects the government's determination to bolster the growth of companies that will help the nation readjust its growth model,' Kingsun Investment Management analyst Dai Ming said. 'The IPO market would remain strong this year although a flood of new share offerings were blamed for the market downturn last year.'
Sinovel chairman Han Junliang said in an online roadshow yesterday that the company would achieve annualised profit growth of at least 30 per cent in the next five years, driven by the mounting demand for wind-energy equipment on the domestic and overseas markets.
The company aims to become the world's largest producer of wind turbines in five years.
Beijing is set to approve more technology firms, including companies related to alternative energy, to list on mainland exchanges this year as it attempts to shift focus from massive fixed-asset investments to technological innovations in its quest for sustainable economic development.
Sinovel, which had initially planned to raise 3.4 billion yuan, last year reported a net profit of 1.89 billion yuan for 2009, triple its earnings in 2008.
Blowing in
The number of shares the mainland turbine maker plans to sell in its listing on the Shanghai stock exchange: 105m
