Hanergy Thin Film Power Group Ltd., whose meteoric rise earlier this year briefly made its founder China’s richest man, might have been worth a fraction of its value when trading was suspended this past summer
The Wall Street Journal is reporting that the stock is worth about US$1.16 billion, down from US$21.06 billion when trading was halted after the shares lost almost half of their value in less than 30 minutes on May 20.
The shrunken valuation comes from a regulatory filing on the sale of a 6 percent stake by founder Li Hejun at 18 fen (3 US cents) per share to unnamed parties.
Li is selling about 2.5 billion of his shares, his first outright sale, foreshadowing potential difficulties in 2016.
The company, whose stock went through a rapid rise and fall this year, is under investigation by the Hong Kong securities regulator and is trying to reinvent itself without its biggest customer — Beijing-based Hanergy Holding Group Ltd., its closely held parent company.
A Hanergy Thin Film spokesman didn’t respond to requests for comment.
The trials of what was once one of the most high-flying firms on the Hong Kong exchange underscore the difficulties investors continue to face in parsing Chinese companies, especially those like Hanergy Thin Film that are linked to mainland conglomerates, where disclosure requirements are less rigorous.
Until August, Hanergy Thin Film’s main business was selling solar panel-making equipment to its parent, which accounted for as much as 99 percent of the listed unit’s revenue during the past few years.
The group’s business plan called for Hanergy Holding to make the panels in China, use some to develop domestic power projects and sell some back to the unit for projects outside the country.
Thin film, which is less efficient than more-common panels based on crystalline silicon technology, has not caught on.
The thin-film market share has stayed flat around 10 percent in recent years versus crystalline silicon, and Hanergy’s share of that 10 percent is close to zero, analysts said.
– Contact us at firstname.lastname@example.org