Longyuan Power drops on share sale plan

The share price of China Longyuan Power, China’s biggest producer of wind power, yesterday dropped 10.8% after the company said it plans to issue new H-shares, as investors worried about the dilution and about a potential overhang on the stock until the sale has been completed. The drop left the stock at its lowest level since the listing in Hong Kong more than three years ago.

Longyuan didn’t specify the size of the deal, but said it may account for up to 50% of its existing H-share capital and 18.2% of its overall share capital. Based on Friday’s closing price of HK$5.84, the company could raise up to about...