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China's biggest IPO since 2011 debuts with a bang

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Shares of China National Nuclear Power (CNNPC), a unit of one of the country's two state nuclear reactor builders, rocketed by 44 percent in its debut on the Shanghai Stock Exchange on Wednesday.

CNNPC shares opened at 4.88 yuan, up from its issue price of 3.39 yuan, in spite of a weaker market backdrop. The benchmark Shanghai Composite slipped 0.9 percent in early trade after index provider MSCI postponed its decision on whether to include China-listed shares in its emerging markets benchmark index.

"Large cap stocks are very much in demand, plus this is a very solid company," Uwe Parpart, managing director and head of research at Reorient Financial told CNBC on Wednesday.

The debut follows an initial public offering (IPO) which raised 13.19 billion yuan ($2.13 billion), the largest Chinese listing since 2011 when Power Construction Corporation of China listed, according to data from Dealogic. Proceeds from its IPO will go towards building four new nuclear power projects, Reuters reported.

Despite CNNPC's bumper one-day rally, Parpart says it's not too late to gain exposure to the stock.

"I would recommend buying the shares without any hesitation. The company has got a secure order book and is aligned with Chinese policy," he said.

China has plans to aggressively ramp up its nuclear power generation over the coming years. It aims to expand its total nuclear capacity to 58 gigawatts by the end of 2020 from 21 GW currently.

Given such dynamics, he expects that CNNPC shares will likely be more resilient amid market volatility.

"It will go up when the market goes up, and it will go down less when the market goes down."

Ben Collette, head of Asian equities at Sunrise Brokers, is also upbeat on the outlook for the stock.

"Would I buy some (shares) if I could get some? Yes absolutely," Collette said. "China has been the real darling for IPOs this year. In the last three months, the average IPO return has been around 86 percent," he said.

His bullishness is partly driven by expectations that the company will acquire offshore assets to make its business more vertically integrated.

"We're 80 percent sure they are going to buy something. I think Paladin is the obvious choice given they are existing shareholders," he said, referring to the Australia-based uranium producer.

CNNPC's shares are traded under the ticker: 601985.SS.

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