Analysts at Daiwa have released a report commenting on the latest developments regarding CHINA RES POWER (00836)'s plan to spin off its renewable energy subsidiary. The company recently detailed its proposal to list CHINA RES POWER New Energy Holdings on the Shenzhen Stock Exchange's A-share market.

The subsidiary intends to issue approximately 2.107 billion new shares, representing between 16.2% and 18.19% of its enlarged share capital. The capital raised from this initial public offering is earmarked primarily for the development of new energy projects.

Daiwa notes that this announcement represents a new step forward since the spin-off plan was first unveiled in March 2023. Following the completion of the listing, CHINA RES POWER New Energy is expected to remain a subsidiary of CHINA RES POWER, with the parent company's stake reducing from 100% to approximately 83.8%. The subsidiary's financial performance will continue to be consolidated into the parent company's statements.

The investment bank views the progress of the IPO as a positive catalyst. However, it believes the market has largely anticipated this move. Consequently, Daiwa suggests investor focus is now shifting towards trends in electricity tariffs and the visibility of future earnings. Based on this assessment, Daiwa has maintained its 'Hold' rating on CHINA RES POWER shares.