Sinovel Wind Group Co, China's largest wind turbine producer, plans to raise up to 9.46 billion yuan ($1.4 billion) through an initial public offering in Shanghai, after setting a higher-than-expected IPO price range that reflects investor enthusiasm for renewable energy stocks.
Sinovel will sell up to 105.1 million shares at 80-90 yuan apiece, according to an exchange filing, potentially enabling the company to raise as much as 9.46 billion yuan, nearly three times its original fundraising target of 3.45 billion yuan.
Because of government support for renewable energy, China has been doubling installed wind power capacity every year for the past several years. In 2009, China became the third largest wind energy provider worldwide — behind the United States and Germany.
Despite increasing competition, Sinovel still cannot meet rising customer demand and consolidation in the sector would benefit the industry, Sinovel said in its IPO prospectus.
Sinovel competes with major domestic rivals Xinjiang Goldwind Science and Technology and Dongfang Electric Corp as well as global competitors including Vestas Wind , Siemens (SIEGn.DE) and General Electric Co .
Sinovel's IPO range represents 43.41-48.83 times the company's 2009 earnings, compared with an average of around 30 times for Shanghai IPOs last year.
The company has said it would use the proceeds to build more wind power installed capacity, including a 3 megawatt wind power generator, and to fund a research program on wind power capacity of more than 3 megawatts.
($1=6.59 Yuan)
