XD Electric planning US$1.5b IPO

China XD Electric, China’s largest electricity transmission and distribution equipment manufacturer, will issue 1.3 billion shares in its Shanghai IPO and potentially raise as much as US$1.5 billion in the first major mainland IPO of 2010, reported Reuters. While extensive speculation in China’s stock market has historically generated high valuations for new IPOs, XD Electric’s relatively modest maximum PE ratio of 34.17 on its fully diluted 2008 net profit per share comes in the wake of weaker January initial public offerings by CNR and China National Chemical Engineering. The funds raised by XD Electric will be used for expansion and technical upgrading.