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Shares of China Three Gorges Renewables Group rose 44% in its debut after the company raised $ 3.6 billion in China’s largest initial public offering in 2021.
Shares of the renewable energy branch of China Three Gorges Corp., the state-owned company that lends its name to the hydroelectric dam on the Yangtze River, shot up the maximum daily amount allowed by the Shanghai Stock Exchange on Thursday.
The group raised $ 22.7 billion ($ 3.6 billion) on its IPO, the largest stock debut in the country since Sale of shares worth $ 7.6 billion of China’s largest chip maker, Semiconductor Manufacturing International Corporation, last July. The jump from day one boosted the company’s market capitalization to $ 17.1 billion, according to Bloomberg.
The first day of China Three Gorges Renewables, which also has interests in wind power, came when China faces a sharp rise in the cost of coal power.
The move reflected Chinese investors’ strong appetite for green energy assets, as Beijing wants to make wind a much larger contributor to the country’s electricity production, said Bruce Pang, head of research at the investment bank. China Renaissance.
“It’s not just a trend in China, but a worldwide trend,” Pang said.
Demand for shares on the stock exchange exceeded supply 78 times, according to the company.
The group will use part of the proceeds from the sale of shares to cover nearly half the cost of seven offshore wind turbine projects, as he and other renewable companies are rushing to complete the infrastructure sooner government subsidies expire at the end of the year.
“We anticipate that China Three Gorges will strive to complete the projects this year to receive the grants,” said Apple Li, a credit analyst at S&P Global Ratings.
The credit rating agency said this week that the IPO would bring a significant injection to the balance sheet of the main group China Three Gorges, as the subsidiary pursues an “ambitious non-hydraulic renewables development plan” over the coming years.
China Three Gorges Renewables launched its first floating wind platform on the coast of Zhejiang province in southeast China on Tuesday. The company dit the platform could provide “green, clean energy for 30,000 homes a year.”
Unlike fixed wind turbines, which can only operate in shallow water, floating turbines it can generate electricity beyond the coast, harnessing the power of the strongest ocean winds.
In September, China committed to achieve carbon neutrality in 2060, but its recovery fueled by the Covid-19 pandemic industry has put pressure on its environmental ambitions. In 2020, it produced records amounts of steel and increased approvals for new coal plants.
Last year’s research led by Wang Muyi, an analyst at the UK’s Ember think tank, found that new investments in wind, hydro, solar and nuclear power he could not keep up with a sharp increase in electricity use in China between May and October.
The country also suffers from one coal shortage as industrial activity increases, prices rise. Last month, a meeting of the state council chaired by Premier Li Keqiang stressed the need to make even more use of China’s “rich coal resources”, but added that energy capacity would be increased. wind, solar, nuclear and hydraulic to ensure energy supply this summer.
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