Himin Solar Energy Group, China's top maker of solar water heaters, secured a nearly US$100 million investment Firday from Goldman Sachs and CDH Investment.
The deal comes at a time when venture capital activities are slackening in the country as IPOs dry up, proving that investors remain zealous about China's promising solar industry.
The investment is expected to help Himin's expansion drive both at home and overseas.
Himin sells 2 million sq m of solar water heaters annually, which equals the total amount produced in the European Union and is twice that of North America.
The firm is now building the world's largest base of solar thermal utilization in Dezhou, Shandong province in East China, where the company is headquartered. Himin's second production line of solar water heater tubes will start construction this month.
"We plan to double our investment in 2009 and expect sales to grow by 50 to 100 percent," said Huang Ming, chairman of Himin Group, adding the company is planning to expand the number of its distribution, service and training centers in major Chinese cities.
According to China's blueprint on renewable energies approved by the State Council, the country aims to raise the consumption rate of renewable energies from 7.5 percent in the total energy consumption in 2005 to 10 percent in 2010, when installed solar heaters will hit 150 million sq m.
The amount of money raised by Chinese companies in the first 11 months of the year through IPOs fell 70 percent over last year to US$21.8 billion, according to Beijing-based market research house Zero2IPO.
The number of IPOs and total capital raised hit three-year lows, falling 44.3 percent and 75.3 percent respectively year-on-year.
After many offerings were trading below issue prices on the first day of their IPOs, Chinese regulators have slowed the pace of approving new IPOs since September. Many new IPOs have been opposed by investors over concern that oversupply could stifle activity.
That, coupled with stock investors' sagging interest, has curbed venture capitalists' activities as they are having difficulties in getting returns.
Himin is also a victim of the sagging stock market. The firm has been planning a domestic listing in September which has been forced to be delayed, a company source said.
Huang said Himin is still pushing forward with the listing but declined to give a timetable.
(China Daily December 13, 2008)