How appropriate that the first big greentech IPO news of 2011 comes from China. Sinovel Wind, China’s biggest wind turbine producer, announced Tuesday that it plans to raise about 9.46 billion yuan ($1.4 billion) in an initial public offering.
That valuation is about about three times Sinovel’s earlier IPO target of 3.45 billion yuan, and would make its debut the biggest ever on the Shanghai stock exchange. That’s pretty aggressive — but given China’s growing economy and boom in greentech IPOs last year, perhaps not unexpected.
Chinese greentech companies have been increasingly matching their counterparts in the U.S. and Europe in terms of IPO activity. Five Chinese companies raised $180 million in IPOs in the third quarter of 2010, compared to two in North America that raised a combined $172 million. In October, China Ming Yang Wind Power held a $350 million IPO, and Xinjiang Goldwind raised $917 million in an IPO on the Hong Kong stock exchange. Across all sectors, China’s IPO market hit a record 478 billion yuan ($72 billion) on the Shanghai and Shenzhen exchanges in 2010, up 155 percent from 2009, according to consultancy PwC.
On the greentech front, China’s preeminence as a manufacturer of solar and wind power systems, next-generation batteries and electric and plug-in hybrid vehicles for export is starting to be matched by a growing domestic hunger for renewable power, energy storage and cleaner transportation. China is also investing heavily into smart grid, with plans to spend hundreds of billions of dollars over the coming decade.
With so much greentech action underway in China, Western greentech investors are hungry to grab a piece of it. For example, VantagePoint Venture Partners launched a $100 million China-focused fund in September.
Swedish-Chinese waste-to-energy joint venture reCulture Renewable Energy plans a $1.4 billion IPO on the Shanghai or Hong Kong stock exchanges in the coming months, and aims to apply the proceeds to build a number of power plants in the country over the next five years. (For more, read Carving a Path to Greentech in China at GigaOm Pro (subscription required)).
Of course, the global wind industry has seen a marked slowdown in the second half of 2010, and that’s led to slowdowns in wind power IPOs. In the U.S., First Wind canceled its $1.2 billion IPO plans in October, and in December, China’s third-largest wind turbine maker, Huaneng Renewables, postponed its own $1.28 billion IPO on the Hong Kong exchange. Goldwind’s October IPO brought in less money than its original plans to raise $1.2 billion, which were put on hold in June because of “market conditions.”
More broadly, China’s IPO market may suffer in 2011 on continuing economic woes in Europe and the U.S., even if China’s economy continues to grow as expected. That’s according to a just-released PwC analysis that predicts Hong Kong-based IPOs will fall about one-third compared to a record-setting HK$445 billion ($57.3 billion) in 2010.
In the meantime, there’s no lack of potential greentech IPO candidates in the U.S., including solar thermal upstart BrightSource Energy, smart grid networking leader Silver Spring Networks, electric vehicle maker Smith Electric Vehicles, LED maker Bridgelux and solar microinverter maker Enphase Energy, to name a few.
Related content on GigaOM Pro (subscription required):
- Carving a Path to Greentech in China
- Cleantech Financing Trends: 2010 and Beyond
- Beyond the Breakthrough: Building A Better Battery Business
Image courtesy of ANR2008 via Creative Commons license.