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Three Gorges Renewables, the green-energy and offshore wind division of utility behemoth China Three Gorges, saw its stock soar onto the Shanghai exchange in an enormously successful IPO on Thursday. The offering was heavily oversubscribed, with demand for shares exceeding supply by a factor of 78 before the debut, the company said. On the first day of trading, it skyrocketed 44 percent before tripping the Shanghai Exchange's volatility circuit breaker. <\/p>\n
The IPO raised $3.6 billion, and Three Gorges Renewables plans to put the money into a string of seven new offshore wind farms off China's coast. Taken together, they will have a total capacity of about 2.5 gigawatts. <\/p>\n
The majority state-owned Three Gorges Renewables is expected to grow rapidly over the next decade, as China is pursuing a target of up to 35 percent renewable power on its grid by 2030 – triple the share today. Analysts expect that this could drive Three Gorges Renewables' profits far higher, perhaps by as much as 20 percent per year. (Last year, its revenue and profits both rose by 26 percent.)<\/p>\n
“Investors are quite enthusiastic about the prospects of the renewable energy sector, as China has been encouraging its development, in line with the country’s long-term goals,”? Emperor Securities research director Stanley Chan told the South China Morning Post. <\/p>\n
As shown by the financial goals of its IPO, offshore wind is a major component of Three Gorges' business strategy – and of the Chinese renewables market in general. Last year, Chinese energy developers installed half of the new offshore wind capacity commissioned worldwide, according to the Global Wind Energy Council. <\/p>\n
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