GCL-Poly Drops After China Sets Solar Target: Hong Kong MoverMichelle Yun
GCL-Poly Energy Holdings Ltd., the world’s biggest polysilicon maker, fell the most in two weeks in Hong Kong trading after China set a lower-than-expected target for installed solar capacity this year.
GCL-Poly declined 6.3 percent, the most since Jan. 10, to HK$2.53 after earlier falling as much as 9.6 percent in Hong Kong. The benchmark Hang Seng index declined 2.1 percent.
China, the world’s biggest solar market, plans to add 10 gigawatts of solar power in 2014, the same as last year’s target, according to a National Energy Administration statement posted on Jan. 24. That’s less than the 14-gigawatt figure reported this month by state television, citing the need for the nation to quicken renewable energy development.
“This announcement was a big, negative surprise to the solar sector,” Michael Parker, a senior analyst at Sanford C. Berstein & Co. in Hong Kong, said in a report today. “If China is able to constrain the market to 10 gigawatt in 2014, that would be an unambiguous negative for the sector.”
Baoding, China-based Yingli Green Energy Holding Co., the world’s biggest solar panel maker, posted an 8.2 percent drop in its American depositary receipts on Jan. 24, after the announcement. Trina Solar Ltd.’s ADRs plunged 9.8 percent in New York trading on Friday.
China surpassed its target last year, installing a record 12 gigawatts of solar capacity, according to Bloomberg Industries. Berstein’s Parker said the nation is unlikely to constrain new capacity this year to 10 gigawatts.
“One explanation for Friday’s surprisingly low announcement is that the revised 2014 target is simply a placeholder until the 2015 target can be increased,” Parker said. “We know that Chinese air quality is not going to get better without some big changes in energy policy, including greater use of renewables.”