Aixtron Falls Most Since 1999 After Losing Chinese Orders

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  • German company cuts 2015 revenue forecast to 190 million euros
  • Aixtron fails to meet Sanan Optoelectronics's requirements

Aixtron SE, a German equipment supplier to the semiconductor industry, fell the most in 16 years in Frankfurt after Chinese client Sanan Optoelectronics Co. canceled orders and the company reduced its sales outlook for the year.

Aixtron fell as much as 43 percent, the steepest intraday decline since January 1999, after saying Sanan Optoelectronics will reduce its order of AIX R6 MOCVD systems to the three already delivered from 50 because it failed to meet the Chinese company’s “specific qualification requirements.”

“A worst-case scenario has materialized,” Guenther Hollfelder, an analyst at Baader Bank AG who downgraded the stock to sell from hold, said Thursday in an e-mailed note. The failure to meet the Chinese client’s demands is a “major setback” for efforts to regain competitiveness against U.S. rival Veeco Instruments Inc., which appears to have shipped and installed its part of the Sanan orders without issues, he said.

Aixtron cut its full-year sales guidance to about 190 million euros ($209 million) from 190 million to 200 million euros. Revenue for 2016 will be little changed from a year earlier, the Herzogenrath, Germany-based company said late Wednesday. Aixtron still targets a break-even in earnings before interest, taxes, depreciation and amortization in the second half of 2015.

The canceled orders from Sanan add to a difficult market environment for equipment makers, who are struggling with slowing demand for LED chips in China, mainly for TVs, Hollfelder said. Aixtron fell 41 percent to 4.11 euros as of 9:20 a.m. local time.

Aixtron plans to publish a full set of results on Feb. 23.