PwC: China’s renewable and cleantech industry fuelled by capital

Beijing, 11 October 2018 - Findings from PwC’s MoneyTree™ China Renewable and Cleantech Investment Report (Q2 2018) (the “Report”) indicate that PE/VC investments in the renewable and cleantech industry are generally continuing on an upward trend. Further, related M&A activity shows signs of revival. Notably, an initial public offering by a unicorn raised a large sum in the quarter, helping to elevate the market.

According to the Report, 49 investments were made in China’s renewable and cleantech industry in Q2 2018. The volume is in line with the level in Q1, also an active period. The value of investments jumped 62% from last quarter to US$642 million, demonstrating a general upward trend. Of note, A round investments saw outstanding performance in the period, with two deals valued at RMB200 million. The deals indicate investors are beginning to include new companies/programmes in the investment calendar.

With respect to subsectors, the environmental protection sector accounted for 46% of the totals of both deal volume and value for the period. There were 9 investments in the new material sector, making it the second most active subsector. Concurrently, the new energy vehicle sector notched the second highest value, attracting US$160 million in investment for the quarter.

Findings from the Report indicate that 38 M&A transactions valued at US$1.373 billion occurred in Q2 2018, up by 46% and 13% in deal volume and value respectively from the last quarter.

Two companies went public in the period, raising a total of US$913 million. One was a unicorn company in the engine battery sector, which drove the total fundraising value up by 389% from last quarter. The two listings were in Shanghai and Shenzhen.

Recent policies and regulations supporting China’s renewable energy and cleantech industry have promoted the establishment of environmental protection industry norms and standards, price adjustments and technological changes in the energy sector. Recent regulations have also bolstered sustainable development of the new energy sector. At the end of June, the central government and the State Council issued guidance directing the next steps for ecological environment protection, pollution prevention and control, in line with the overall goal of achieving ecological environment control by 2020.

Lisa Wang, PwC China Power & Utilities Leader noted: “As an arena characterised by high-tech, high-efficiency and sustainable development, the renewable and cleantech energy industry continues to attract vibrant start-ups, while appealing to a broad investor base. With the continuous improvement of technology and the gradual maturity of industrial development, the sector is on course to cultivate more unicorn enterprises with considerable growth potential. The industry is poised to pique the interest of the investment community, which will draw even more capital. The added funding will, in turn, promote further development of enterprises, forming a virtuous cycle of coordinated growth.”

 

Download the full report and see more details at: https://www.pwccn.com/zh/industries/energy-utilities-and-mining/publications/moneytree-cleantech-report-2018-q2.html

 

Notes:

Classification of renewable energy and cleantech subsectors in the Report:

Subsector

Classification

 

Energy saving

Energy saving sector covers energy-efficient technologies and equipment, products and services, etc.  

Environmental protection

Environmental protection sector includes environmental protection technologies and equipment, products and services, as well as recycling of resources, etc.  

New energy vehicles

New energy vehicles sector refers to the R&D, design, manufacturing and service offerings related to new energy automotive parts, systems and vehicles.  

Clean energy technologies

Clean energy technologies sector covers energy generation via solar, wind, nuclear, biomass, ocean, hydrogen, combustible ice, shale gas, distributed energy and smart grid, etc.  

New materials

New materials can be divided into three categories: advanced basic materials, key strategic materials and advanced new materials. According to the scope of application, it can be divided into energy-saving and environmental protection materials, electronic information materials, biological materials, high-end equipment materials, new energy materials, new energy vehicles materials, etc.  

Note: Under the framework of this classification, companies only engaged in renewable energy and cleantech related information services were not included in the research.

 

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Vivian Huang

Deputy Manager, PwC China

Tel: +[86] (10) 6533 8198

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