Hanergy Thin Film Power Group Ltd Shares Soar on Positive Guidance

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Solar firms are hot in China right now after the publication of a documentary detailing the huge pollution problems the nation is facing. Related to this, Hanergy Thin Film Power Group shares moved up 22% on the Hong Kong Stock Exchange Wednesday after the firm provided positive guidance for profit and growth in transactions with third-party customers in 2014.  Of note, Hanergy shares are up more than 250% since early November.

The firm’s market cap topped $28 billion after the big move up today, leading some analysts to question the lofty valuation. That compares with a $6 billion market cap for First Solar, the largest American thin-film solar manufacturer.

Hanergy’s largest shareholder and chairman Li Hejun is worth around $21.1 billion according to the just-released 2015 Forbes Billionaires List.

Positive guidance sends Hanergy Thin Film shares skyrocketing

Hanergy Thin Film is the largest supplier of thin-film solar equipment and products in China, and apparently business is very good. Annual net profit is likely to increase by “more than” 55% in 2014, Hanergy noted after the close of trading Tuesday. The company benefited from higher revenue, a more business from third-party customers as well as from the sale of five power station projects.

Hanergy anticipates that close to 35% of its revenue for 2014 will from non-internal transactions, “a significant increase” from 2013.

Recent deal with Macrolink New Resources

Last week Hanergy raised HK$5.46 billion, or $705 million, by selling 1.5 billion new shares (a 3.48% stake) to Macrolink New Resources for HK$3.64 per share.  Macrolink is a part of the Macrolink Group, firms connected to Chinese tycoon Fu Kwan.  Hanergy’s statement noted it would use the funds for investment and development “when opportunities arise.”

Of note, Macrolink also contracted to buy $198 million of production equipment to produce solar panels to be installed on buildings. As part of the deal, Hanergy will provide consulting services to for a $462 million fee.

Chinese “green” stocks soaring

Hanergy’s stock was just one of several “green” stocks that moved up in Hong Kong after a great deal of discussion over the last couple of days regarding a new documentary titled Under the Dome that exposes China’s severe pollution problems.

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