China Resources Power Holdings Co is betting China's booming economy and a power supply shortage will offset lower charges and higher coal prices, as it tries to lure investors to its Hong Kong and US share sales.
The Hong Kong-based company said it aims to raise as much as HK$2.58 billion (US$332 million) selling 920 million shares at HK2.20 to HK$2.80 each. The company, the first Chinese utility in four years to offer stock overseas, plans to start trading the shares on Nov. 12, according to its prospectus.
China's economy is slated to expand 8.5 percent this year and power consumption in China's more affluent provinces, such as Guangdong and Jiangsu, is rising more than 15 percent annually.
Power producers had to drop rates after the government eliminated guaranteed returns as part of industry reforms, favoring companies that can secure cheaper coal supplies.
"We're a low-cost power producer located in high-growth regions," Wang Shuai Ting, China Resources Power's vice chairman and chief executive, told reporters in Hong Kong via a video conference from New York, where he is promoting the sale to US investors. "To survive you have to be competitive and be a low-cost producer. Our costs are lower than our peers."
The offer will open at 9am today in Hong Kong and the stock will be priced on Friday, the arrangers of the sale said.
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