Datang Environment seeks growth in new businesses and markets via Hong Kong listing

Datang Environment Industry Group, the power pollution control projects unit of state-owned power generator China Datang Group, aims to raise up to HK$2.56 billion via an initial public offering to fund operations and new businesses.

Besides operating facilities to cut pollutants for power plant owners, the company plans to enter the so-called energy management contract business, by helping coal-fired power plant operators achieve savings from conserving energy. It also wants to make inroads into the waste water and solid waste treatment business.

“China’s [coal-dominated] energy resource base means environmental protection and energy conservation are key for our nation’s development,” Datang Environment general manager Deng Xiandong told reporters on Wednesday.

Datang Environment warned in its prospectus that any slowdown in the expansion of China’s coal-fired power plants would negatively affect its business.

According to industry regulator the National Development and Reform Commission, the nation completed coal-fired power projects worth 66.1 billion yuan in the first nine months of the year, down 8.4 per cent year-on-year amid a major capacity oversupply situation.

The decline came after a 46.6 per cent jump last year to a record 139.6 billion yuan, as sharp falls in coal prices encouraged developers to build more power plants.