China PV firm sets IPO price at 50 times earnings
Updated: 2011-08-29 16:58
Chinese photovoltaic equipment maker Beijing Jingyuntong Technology has set an initial public offering price at 50 times its historic earnings, boosted by demand from the country's push for solar energy, Reuters reported.
The firm has set a price range of 40-42 yuan a share for the Shanghai offering, putting it on track to raise up to 2.52 billion yuan ($395 million), nearly three times more than what it had originally sought.
The range valued the company at 50.92-53.47 times its 2010 earnings, the company said.
Investors were likely buying in on the bright business outlook for companies like Jingyuntong as China aims to aggressively build up its photovoltaic capacity.
"China will definitely surpass Germany to be the world's biggest market for photovoltaic," said Xiao Shijun, an analyst with Guodu Securities in Beijing.
"There's huge demand on upstream infrastructure and equipments, supply of which still lags demand," he said.
China will double its solar capacity to around 2 gigawatts (GW) by the end of the year as the world's largest solar-panel maker ramps up domestic installation, according to a report by the Energy Research Institute, led by the National Development and Reform Commission (NDRC).
The report also said China was expected to produce 90,000 tons of polysilicon this year, representing 80 percent of its domestic demand.
Jingyuntong, which competes with Shenzhen-listed Zhejiang Jinggong Science and Technology Co Ltd and Jiangsu Huasheng Tianlong Photoelectric Co Ltd, plans to sell up to 60 million shares in the IPO.
Jingyuntong had originally aimed to raise about 900 million yuan to fund the first phase development of a silicon industrial park in Beijing, according to its IPO prospectus.
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