(Yicai) Nov. 24 -- China XD Electric said its fifth-largest shareholder GE Smallworld Singapore, a plastic products manufacturer, will reduce its stake in the power equipment supplier for the third time over the past year, with the latest cut coming after its shares hit an over 10-year high.

GE Smallworld, which holds a 7 percent stake in XD Electric, plans to sell up to 154 million shares within three months from Dec. 12, the Xi'an-based company announced late on Nov. 20. Based on the stock's closing price that day, the Singaporean company could cash out around CNY1.4 billion (USD197 million).

XD Electric [SHA: 601179] closed 2.1 percent higher at CNY8.13 (USD1.14) a share in Shanghai today. Boosted by the growing popularity of China's new-type power system, the stock surged over 44 percent from Oct. 27 through Nov. 10, reaching as high as CNY11.08 for the first time since June 2015. However, it plunged by the 10 percent daily trading limit on Nov. 21.

GE Singapore cited "its own operational and development needs" for the latest cut in its XD Electric stake. It bought all of its shares in the Chinese firm from a private placement in 2016 at a price of CNY4.40 apiece.

The entire power equipment sector in China has been experiencing a significant surge since April, with the Hang Seng China A Power Grid Equipment Index hitting a decade high at the beginning of this month. However, the industry saw a major broad-based correction, with an overall pullback of 16 percent over the past two weeks, while several leading companies saw their stock tumble more than 10 percent last week.

After the index reached its second-highest level in history, it accumulated substantial profits and was facing significant technical correction pressure, industry insiders pointed out. However, the long-term growth outlook for the power equipment market remains solid, they added.

China's power grid investment will likely exceed CNY4.1 trillion (USD576.9 billion) during its 15th Five-Year Plan from next year through 2030, considering demand for ultra-high voltage, main grid, and distribution network construction, with a compound annual growth rate of 5 to 6 percent, according to a report by China International Capital. The investment will focus on strengthening the main grid framework and the intelligent transformation of the distribution network.

Editor: Martin Kadiev