Wind energy Sinovel debuts below IPO price

Sinovel Wind Group Co, China’s top wind turbines producer, debuted on the Shanghai Stock Exchange today with an opening price 3.33 percent lower than its initial public offering (IPO).

Sinovel fixed the issue price of its IPO at 90 yuan per share and planned to raise up to 1.4 billion U.S. dollars in one of the most expensive main board IPOs in Shanghai. The company was hoping to ride high on the back of strong demand for Chinese renewable energy stocks.

The stock price of Sinovel climbed to 88.80 yuan earlier this morning and closed at 83.64 yuan after morning’s trade.

On Jan. 10, three employees of Sinovel died while installing and testing wind turbines in Zhangjiakou right before the company’s public listing. Sinovel won a bid to build wind turbines to provide 1.35 million kilowatts of the total 3.3-million-kilowatt capacity in Zhangjiakou. Given the wind turbines’ tight installation schedule, the incident is drawing attention to possible quality issues that could have contributed.

Sinovel is China’s largest producer of wind turbines. Funds raised will be used for the research and development of wind turbines with a capacity of more than 3 megawatts, building installed wind power capacity of 3 megawatts and to construct an overseas wind turbine assembly base.

Financial institutions have differed significantly on their expectation of Sinovel’s IPO prices. One of this IPO’s main underwriters, Essence Securities, priced Sinovel at 95 to 110 yuan per share in a report released yesterday. First Capital Securities valued the share at 135 yuan per share, while Founder Securities gave more moderate prices of 79.81 to 97.16 yuan.