Key Takeaways:
Daiwa maintained its Hold rating on CHINA RES POWER after its subsidiary CR New Energy priced its A-share IPO at RMB10.11 per share.
"The spin-off listing is positive news but largely anticipated by the market," Daiwa said in a report. The broker noted investors will shift focus to electricity tariff trends and earnings visibility going forward.
CR New Energy issued 2.107 billion new shares, representing 16.2 percent of the enlarged share capital, raising approximately RMB21.3 billion. The IPO valuation of 1.21x price-to-book exceeds CHINA RES POWER's current H-share P/B of 0.87x. The listing is expected to unlock approximately RMB31.0 billion in value, equivalent to about RMB5.4 per share or HKD5.9 per share.
CHINA RES POWER shares traded 0.7 percent higher, with short selling volume of $43.01 million representing 16.2 percent of turnover. The RMB31.0 billion value unlock represents a significant premium to the parent's current market valuation, though Daiwa said the market had already priced in the spin-off.
The IPO pricing gives CR New Energy a valuation premium over its parent, suggesting strong demand for renewable energy assets in the A-share market. Investors will watch CR New Energy's first-day trading performance and CHINA RES POWER's upcoming interim results for updated earnings visibility.
This article is for informational purposes only and does not constitute investment advice.
