Nov 20, 2020 (China Knowledge) - Shanghai Electric Group (601727) issued an announcement yesterday stating that its holding subsidiary Shanghai Electric Wind Power Group ("Electrical Wind Power") has received approval from the Sci-Tech Innovation Board (STAR Market) to list on the Shanghai Stock Exchange. It is reported that Shanghai Electric will be the second A-shares company to exercise a spin-off after China Railway Construction.
According to the prospectus, Shanghai Electric Group directly holds 99% of Electric Wind Power and indirectly holds 1% of Electric Wind Power through its wholly-owned subsidiary, Shanghai Electric Investment.
As a whole Shanghai Electric’s main business is divided into three major sectors: energy equipment, industrial equipment, and integrated services. Among them, wind power equipment belongs to the energy equipment business segment, and its proportion does not represent the largest in its overall business structure. Shanghai Electric Group's revenue in 2019 reportedly booked in RMB 126.65 bln, and electric wind power revenue accounted for approximately 8.26%.
However, its orders for wind power equipment have increased rapidly in recent years. As of the end of 2019, Shanghai Electric had orders for wind power equipment of RMB 29.81 bln, up 49.8% year on year. Among them, orders for offshore wind power equipment raked in RMB 16.99 bln, an increase of 40.7% year on year.
The core businesses of its subsidiary Electric Wind Power mainly include wind power equipment design, R&D, manufacturing and sales, and aftermarket support services. As a backbone of national clean energy, Electric Wind Power is currently China's leading wind power equipment machine manufacturer and service provider, and the country’s largest offshore wind power equipment manufacturer and service provider which ranked first in the terms of cumulative installed capacity of offshore wind turbines with a market share of 50.9%.
In 2017, 2018, and 2019, Electric Wind Power achieved operating income of RMB 6.56 bln, RMB 6.17 bln, and RMB 10.14 bln, respectively, and net profits were RMB 252 mln, last year.
In this IPO, Electric Wind Power plans to raise more than RMB 3.10 bln. The proceeds will be to invest in new product and technology development, Shanghai Electric Wind Power Group's Shandong Haiyang Testing Facility, capacity improvement projects, wind turbine production and upgrading, and remaining for supplementary working capital.
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