Hanergy Thin Film Power Group Ltd., the Chinese maker of solar products whose surge briefly made it the industry’s most valuable company, said it could post a loss for the first half after suspending contracts with parent Hanergy Holding Group Ltd. and affiliates.
The suspensions likely saw income drop 90 percent to HK$200 million ($26 million) in the first six months, the Hong Kong-listed company said in a statement to the Hong Kong stock exchange on Aug. 16. The result may be a loss for the period.
Hanergy’s shares have been in a trading halt since May 20 when they plunged by about half, wiping out almost $19 billion in market value. Prior to the drop, Hanergy had surged more than sixfold in a year, making Chairman Li Hejun one of China’s richest individuals.
Even before the collapse, some investors and analysts had questioned Hanergy’s relationship with its parent, pointing out that the majority of Hanergy’s revenue was derived from sales to Hanergy Group. After the collapse, Hanergy scrapped a deal to buy solar panels from the parent. It also halted talks to sell $585 million of equipment and services to Hanergy Group.
Hanergy Thin Film, which is being investigated by Hong Kong’s Securities & Futures Commission, is awaiting regulatory approvals on its reorganization, the Chinese solar company said in the statement warning of the loss.
“The board is of the opinion that the Group’s overall business operation is still functioning normally, and the Group’s financial conditions are sound,” Hanergy said in the statement.
Hanergy said in July that it would challenge a decision by the board of Hong Kong’s SFC to suspend its share trading indefinitely.
The company’s board will meet on Aug. 28 to consider and approve the results for the six months ended June 30, Hanergy said in a statement on Monday.