Shares in Hanergy Thin Film Power Group Ltd (HKG:0566) were off by almost 50% on Wednesday in China before trading was halted. Shares dropped all the way down to 3.91 Hong Kong dollars, off by 47% and wiping out US$18.6 billion from Hanergy’s market cap. The firm has yet to comment on the plunge, which of note occurred during the company’s annual shareholders’ meeting in Hong Kong.
A Hanergy Thin Film Power Group Ltd (HKG:0566) spokesperson did say the firm would make an announcement later in the day.
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Analysts point out that Hanergy chairman Li Hejun was not at the shareholders’ meeting, as he was attending the opening ceremony of the firm’s clean-energy exhibition center in Beijing, according to a statement from holdi9ng company Hanergy Holding Group.
Chinese solar firm Yingli Green Energy follows Hanergy’s plunge on Tuesday
The Wall Street Journal points out that the decline in Hanergy’s share price followed a tumble by China’s Yingli Green Energy (the second-largest global solar manufacturer in 2014, based on data from IHS) yesterday. Yingli’s shares plunged by 37% in New York trading Tuesday, after the firm disclosed that “there is substantial doubt as to our ability to continue as a going concern” in an SEC filing.
Yingli issued a statement on Wednesday saying that some media had taken the earlier statement out of context, and noted that the firm was just being transparent about its risks. CEO Liansheng Miao said in the statement that the company believed it would meet debt-repayment obligations.
Several analysts have already noted that the big fall in Hanergy is unlikely to be linked to Yingli, which had expanded very quickly and is now bogged down in heavy debt.
Keep in mind that China’s solar-panel producers have been in a slump for some years now, trying to deal with a major supply-demand imbalance as the green industry expanded rapidly but demand slackened worldwide (and especially in Europe) due to a sputtering global economy.