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Unstoppable move to renewable energy offers investment promise

“with the needs for energy security and energy demand from countries like China, the move to renewables is unstoppable, and you’re increasingly seeing renewable energy companies that are good value,”

China Goes Green, Keeps Bankers and Investors Busy – WSJ.com. By NISHA GOPALAN, 6 sept 10, Propelled in part by the backing of powerful Beijing bureaucrats, green-themed Chinese companies are set to reap billions of dollars from public offerings to new investors in coming months….

A spate of clean-energy initial public offerings is set to come to market over the next few months. Chinese wind-turbine maker Xinjiang Goldwind Science & Technology Co., which scrapped a US$1.2 billion Hong Kong initial public offering in June, is reviving its plans with a US$1 billion Hong Kong IPO in the next few weeks. Mingyang Electric is planning to raise between US$300 million and US$500 million from a U.S. IPO later this year. China Suntien, the renewable-energy division of Hebei provincial government’s investment arm, is seeking about US$500 million in Hong Kong.

Add to that Huaneng New Energy Industrial Co., China Huaneng Group’s wind-power unit, which is looking to tap markets for a US$1.5 billion IPO in October, and Chinese clean-technology IPOs this year alone could reach record levels………

“The sector has strong growth potential given that the Chinese government policy is clearly supportive,” said Derek Sulger, partner at Shanghai-based private-equity firm Lunar Capital. “We have also observed that many public market investors have looked toward alternative energy as a way to gain exposure to China’s demand for cleaner, more diversified energy sources, particularly in an environment where concerns over the general economic environment have impacted more traditional industries.”……

There is no denying that renewable energy has promise. The cost per unit of electricity generated by solar panels is coming down 20% per year, meaning it could reach levels charged by coal-fired electric firms in about five years, said Tim Buckley, portfolio manager at Sydney-based clean-energy fund house Arkx Investment Management…….

with the needs for energy security and energy demand from countries like China, the move to renewables is unstoppable, and you’re increasingly seeing renewable energy companies that are good value,” Mr. Evison said.That government tailwind could be key, investment pros said. For example, those who bought renewable stocks from coal-rich Australia, where the government doesn’t back renewables in the same way as China, will find their investments there have fallen over the past 12 months by 31%…….

September 7, 2010 - Posted by | China, renewable | , , , , ,

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