GE Smallworld Singapore to Reduce China XD Electric Stake After Shares Peak

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China XD Electric announced that its fifth-largest shareholder, GE Smallworld Singapore, a manufacturer of plastic products, will reduce its stake in the power equipment company for the third time in the past year. The latest reduction follows a period during which the company’s shares reached their highest level in over a decade.

GE Smallworld, holding a 7% ownership in XD Electric, intends to sell up to 154 million shares over the next three months starting December 12. Based on the closing price on November 20, this sale could generate approximately CNY1.4 billion (about USD197 million).

Yesterday, XD Electric’s stock in Shanghai closed up by 2.1% at CNY8.13 (USD1.14) per share. The company’s shares surged more than 44% between October 27 and November 10, reaching a peak of CNY11.08, a level not seen since June 2015. However, the stock experienced a sharp drop, hitting the daily trading limit of a 10% decrease on November 21.

GE Smallworld attributed its decision to reduce its stake to “its own operational and development needs.” The company initially acquired all its shares in XD Electric during a private placement in 2016 at a price of CNY4.40 per share.

The entire power equipment sector in China has seen significant growth since April, with the Hang Seng China A Power Grid Equipment Index reaching its highest point in a decade earlier this month. Recently, however, the sector faced a substantial correction, with an overall decline of 16% over the past two weeks, and some leading companies’ stocks falling more than 10% last week.

Later, after reaching its second-highest level ever, the index accumulated substantial gains and faced technical correction pressures. Industry analysts emphasize, though, that the long-term growth prospects for the power equipment market remain promising.

China’s investment in power grid infrastructure is projected to surpass CNY4.1 trillion (approximately USD576.9 billion) during the 15th Five-Year Plan period from 2023 to 2030. This expansion will focus on ultra-high voltage systems, main grid developments, and distribution network upgrades, with an expected annual growth rate of 5-6%. The investment aims to reinforce the main grid framework and promote the smart transformation of distribution networks, according to a report by China International Capital.