China Singyes Solar Technologies Holding Ltd. saw short interest rise to a record 16.39 percent of free float on July 10 amid concerns that China isn’t developing the rooftop-solar market as quickly as planned.
Short interest in Singyes, which provides engineering, procurement and construction services for such projects, jumped from a one-year low of 0.56 percent of free float, according to the latest Markit data.
The development of distributed solar plants “isn’t as good as expected” in China, said Vincent Yu, a Shanghai-based analyst with SWS Research Co. As a result, “investors may be bearish on the company.”
Even as China pushes to promote rooftop solar, distributed projects accounted for only 16 percent of all solar installations in China at the end of March, while utility-scale photovoltaic plants comprised the remainder, according to data from the National Energy Administration.
Distributed projects typically include rooftops or ground-mounted panels near facilities such as sporting arenas or municipal buildings.
China Singyes Solar’s short interest as a percentage of free float is the highest among its Hong Kong-listed peers, according to the latest Markit data.
The biggest polysilicon maker, GCL-Poly Energy Holdings Ltd., had a ratio of 11.67 percent; short interest for Hanergy Thin Film Power Group Ltd., a solar equipment maker, was 10.11 percent.
Few new projects for contractors such as China Singyes began in the first half, said Karl Liu, a Hong Kong-based analyst from Bank of China International Ltd.
The earnings outlook for China Singyes may weaken as a result, Liu said.
China Singyes’s operations are normal, according to a Zhuhai, China-based investor relations official at the company, who asked not to be identified in line with company policy.
Rising short interest may be more a result of stock market volatility, the official said, adding that the first half is usually a slow time for the entire industry.
The company is confident of achieving product sales and services for 600 megawatts of projects in 2015, with most of the projects starting in the second half, the official said.
— With assistance by Feifei Shen