China Resources New Energy Shares Slide Over 38% From Post-IPO High

China Resources New Energy Holding Co., Ltd. (001248.SZ) fell more than 38.63% from its intraday high on its July 2 listing debut, after closing at 18.51 yuan on July 7, up 0.76% on the day, according to Jiemian News. The stock hit an intraday low of 16.66 yuan on July 7. The company’s market capitalization stood at 240.7 billion yuan at the close, down by more than 70 billion yuan over four trading days. On July 2, the shares surged as much as 198% intraday, triggering Shenzhen Stock Exchange temporary trading curbs, and ended the day up 136.89% at 23.95 yuan, valuing the company at 311.5 billion yuan. The stock then retreated, falling 8.06% on July 3 and 16.58% on July 6. A fund analyst cited by Jiemian attributed the “surge then drop” pattern to short-term speculation around themes such as a central state-owned enterprise spinoff and a mega IPO, and said valuation premiums were pressuring the stock. As of July 7, the company traded at 2.04x price-to-book and 37.22x trailing P/E, versus peers China Three Gorges Renewables (600905.SH) at 1.19x and 25.7x, Longyuan Power (001289.SZ) at 1.72x and 20.2x, and Huadian New Energy (600930.SH) at 1.81x and 23.9x. China Resources New Energy, founded in August 2010, is a wholly owned subsidiary of Hong Kong-listed China Resources Power (00836.HK). Its IPO raised 24.5 billion yuan, the largest on the Shenzhen exchange, and the company said proceeds will be invested in four categories of renewable projects, with planned additions of 7.175 million kW of wind and solar capacity. The prospectus said it was China’s fourth-largest renewable operator by grid-connected capacity; as of end-2025 it had 41.5899 million kW of controlled grid-connected wind and solar capacity and a 2.26% national market share. The company reported revenue of 20.512 billion yuan in 2023, 22.874 billion yuan in 2024 and 22.909 billion yuan in 2025, while net profit attributable to shareholders fell to 8.28 billion yuan, 7.953 billion yuan and 6.102 billion yuan, respectively. In Q1 2026, revenue was 6.211 billion yuan, down 2.81% year on year, and attributable net profit was 1.609 billion yuan, down 31.06%. It forecast first-half 2026 attributable net profit of 3.3 billion to 3.8 billion yuan, down 19.18% to 29.81%, citing factors including weather changes, lower on-grid power prices, fewer utilization hours, higher expansion costs and subsidy accounting adjustments. The report also noted that China’s National Development and Reform Commission (NDRC) and China’s National Energy Administration issued a February 2025 notice to deepen market-based reforms for renewable on-grid pricing, including removing fixed benchmark tariffs and guaranteed offtake mechanisms and requiring wind and solar power volumes to generally participate in market trading.