Shares in China’s largest nuclear power producer, CGN Power, surged 24.1 per cent in their Hong Kong trading debut on Wednesday as investors bet on a government-backed sector primed for growth.
CGN Power raised about US$3.2 billion after pricing the deal at the top of a HK$2.43 to HK$2.78 per share marketing range. By 9.42am, shares in the state-controlled company were trading at HK$3.31, retreating from the day’s high of HK$3.48.
CGN Power plans to use the proceeds of the IPO mostly to expand installed capacity with nine new power generating units and to buy a stake in a nuclear power plant from its parent company.
The mainland aims to increase its reliance on nuclear energy to bring its spiralling greenhouse emissions under control by 2030.
CGN Power said it expected the mainland's installed capacity for nuclear power to surge to 128 gigawatts (GW) by 2030 from 16 GW last year. The company sees its own output more than doubling to 24,970 megawatts (MW) by 2019 from 11,624 MW this year.
The retail portion of the IPO was hugely over-subscribed, triggering a so-called claw-back rule that forced underwriters to reallocate shares from institutional investors to individuals, CGN Power said in a filing on Tuesday. The institutional tranche of the deal was “very substantially over-subscribed”, the company added.