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New Energy
Latest financial news about New enery in China.
Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters specialized about Chinese companies
Bottom line: Hanergy shares will remain forcibly suspended until the Hong Kong securities regulator completes its investigation into price manipulation, and could ultimately return to China where oversight is far less strict.
Hanergy shares stay suspended
I had to smile when I read the latest reports that said the Hong Kong securities regulator has taken the unusual step of ordering a continued suspension of shares of solar power equipment maker Hanergy (HKEx: 566), as it continues a probe into stock price manipulation. My smile wasn’t due to the continued suspension, but rather to the reason that media reports gave for the investigation, namely the spectacular rise in the company’s price over a one-year period, followed by its even faster plunge. (previous post)
That story was actually quite well documented back in May, when Hanergy’s shares lost nearly half of their value in a single hour after rising 6-fold over the previous year, wiping out $19 billion in market value. China stock watchers will know that the reason for my smile is that this kind of meteoric rise and fall is quite ordinary just across the border in China, and seldom attracts similar scrutiny from the China Securities Regulatory Commission. Read Full Post…
Bottom line: Yingli’s use of crowd-funding to finance a small project and the bargain sale price of a small polysilicon maker reflect continuing struggles at second-tier solar companies and the need for more consolidation.
Desperate Yingli tries crowd funding
Two solar energy stories are showing how overcapacity continues to haunt the sector 2 years after it began to emerge from a major downturn. The first involves a desperate-looking fund-raising plan from the struggling Yingli (NYSE: YGE), which is trying to use crowd funding to pay for a new solar plant. The other news involves another slightly bizarre investment in the space, with Internet titan Tencent (HKEx: 700) and real estate giant Evergrande (HKEx: 3333) paying a bargain price for Mascotte (HKEx: 136), a money-losing Taiwanese maker of polysilicon, the main ingredient used to make solar panels. Read Full Post…
Bottom line: China’s securities regulator should work with overseas-listed Chinese firms to chart a well-defined path for them to return home to list, to encourage such movement and avoid burdensome bureaucracy.
Chinese “turtles” return home to list
A growing trend that is seeing Chinese firms abandon US listings to return home gained big momentum last week, when 2 more companies announced plans to de-list from New York and a third that privatized 2 years ago moved close to a China re-listing.
In the first category, medical devices maker Mindray Medical (NYSE: MR) announced a management led buy-out offer late in the week, which was followed a day later by a similar offer for solar panel maker JA Solar (Nasdaq: JASO). Meantime, formerly New York-listed outdoor advertising specialist Focus Media took a major step toward becoming the first Chinese company to re-list at home by injecting itself to an existing Shenzhen-traded company. Read Full Post…
Bottom line: The EU will impose anti-dumping tariffs on all Chinese solar panel makers by year end, and will refuse to negotiate any new agreements to mediate the issue unless Beijing becomes directly involved.
New EU tariffs on 3 Chinese panel makers
A crackdown has officially begun on Chinese solar panel makers who skirted a deal to avoid anti-dumping tariffs in Europe, with word that the EU has taken formal action to punish 3 violators. The action will see anti-dumping tariffs imposed on Canadian Solar (Nasdaq: CSIQ), ReneSola (NYSE: SOL) and ET Solar, reviving a threat they previously avoided by agreeing to voluntarily raise their prices as part of a breakthrough deal in late 2013.
Western solar panel makers in the US and Europe had long complained that they were at an unfair disadvantage to their Chinese peers, which received a wide array of state subsidies through policies like cheap government loans and tax rebates for their exports. Washington responded by levying anti-dumping tariffs on the Chinese companies, while the EU took a more conciliatory approach by signing a deal that saw the Chinese agree to voluntarily raise their prices to levels comparable with their western rivals. Read Full Post…
Bottom line: The latest EU anti-dumping probe into Chinese solar panels is likely to find that manufacturers violated a previous agreement, which could result in new punitive tariffs by the end of this year.
EU launches new probe into Chinese solar panels
In a move that will surprise to no one, the European Union has formally launched a probe into Chinese solar panel makers who are being accused by European rivals of violating a landmark agreement that averted anti-dumping tariffs. I should really stop using the word “landmark” to describe the 2013 deal between the Chinese panel makers and EU that avoided a trade war. In fact, it’s becoming increasingly obvious that a better word to describe the deal would be “foolish”, since it appears many of the Chinese panel makers never really intended to follow the spirit of the agreement to begin with. Read Full Post…
Bottom line: BYD’s latest fund raising will test investor patience as its EV business struggles, while Warburg Pincus will continue to cash out of Car Inc to take advantage of its soaring stock.
Warburg sells down Car Inc stake
A couple of cash-raising stores are in the headlines for 2 car-related companies, led by the news that Warren Buffett-backed new energy car maker BYD (HKEx: 1211; Shenzhen: 002594) is planning a new share sale as it gets weighed down by a big debt and slow sales for its electric vehicles (EVs). Meantime, Warburg Pincus is selling down its stake in car rental specialist Car Inc (HKEx: 0699), following the end of a lock-up period after its IPO last year.
The BYD saga is easily the more interesting of the 2 stories, showing the company’s dreams for making big profits from the emerging market for EVs are moving ahead far more slowly than it had originally hoped. That reality has forced BYD to look to various measures to raise billions of dollars in cash over the last year to keep its operations going. In the process, Warren Buffett’s stake has slowly crept down from an original 10 percent to a current 9 percent. Everyone is watching closely to see if the billionaire investor may ultimately dump his stake completely. Read Full Post…
Bottom line: Yingli’s shares could rebound a bit as concerns ease about an imminent bankruptcy, while Hanergy’s shares are likely to continue sliding when trading resumes to correct from a massively speculative recent run-up.
Hanergy shares tumble
This week has been a volatile time for solar company stocks, which have taken a beating after Yingli (NYSE: YGE) warned about its ability to stay in business due to its heavy debt load. Now Yingli has put out a new statement saying its earlier warning was misinterpreted, helping to reverse a huge sell-off of its shares as it laid out the next big deadline in the struggle to repay its debt.
At the same time, Hong Kong-listed solar equipment maker Hanergy (HKEx: 566) has also been in global headlines, after its shares lost nearly half their value in just a matter of minutes in Wednesday trade. Media are focusing on the huge price swing, which no one seems able to explain. But this really looks like a story of stock manipulation by speculators rather than one of any significant change in the company’s prospects, which once again underscores the dangers of dealing in this kind of thinly-traded stock. Read Full Post…
Bottom line: Yingli is in increasing danger of defaulting on its heavy debt load, which could result in a rapid and disorderly bankruptcy if its hometown government fails to provide support.
Yingli struggles under heavy debt
After sending out a steady series of distress signals over the last few weeks, solar panel maker Yingli (NYSE: YGE) has sent out its strongest trouble sign yet as it struggles under a huge debt load. The most recent signal comes in a new filing with the US securities regulator, in which Yingli says its big debt could threaten its ability to survive, potentially making it the latest casualty in a clean-up of China’s bloated solar panel sector. Such an outcome would see Yingli follow in the footsteps of former high-flyers Suntech and LDK, and would raise the question of whether others may soon follow down a similar path. Read Full Post…
Bottom line: A deal designed to avoid punitive tariffs on Chinese solar panels exported to Europe is rapidly collapsing, with new anti-dumping tariffs likely to be imposed by the end of the year.
New clouds loom in EU-China solar war
A looming clampdown on Chinese solar panels in Europe is rapidly accelerating, with word that the EU will review part of a landmark 2013 agreement that initially helped to prevent a trade war but is showing rapid signs of unraveling. The case centers on the prices of Chinese solar panels, which are typically much lower than their western counterparts due to a wide array of Beijing policies to support the sector.
The US levied punitive tariffs on Chinese panels to address the situation. The EU was set to do the same when several top politicians stepped in and pushed both sides to reach a compromise deal to avoid such action. That deal saw the Chinese manufacturers agree to raise their prices to levels comparable to products from the west. But no sooner did the deal take effect, then the Chinese companies began undermining the agreement by finding ways to secretly refund money to their European customers. Read Full Post…
Bottom line: A negative tale from Chongqing spotlights the challenges Tesla faces in China due to lack of infrastructure, while a big taxi fleet order in Wuhan offers a possible new route for the company to jump-start its Chinese sales.
Tesla taxis hit road in Wuhan
Sputtering new energy car maker Tesla (Nasdaq: TSLA) is in a couple of new China headlines, scoring a big order in the central city of Wuhan and an embarrassing bit of negative publicity in the southwest city of Chongqing. Watchers of the company and its difficult road into China might recall it was exactly a year ago that Tesla’s charismatic founder Elon Musk made a high profile visit to the country to hand over the keys for its first official sale to a local customer.
That event happened on the sidelines of China’s largest annual auto show, which rotates between Beijing and Shanghai and has become a major global event due to the country’s status as the world’s largest auto market. But in a testimony to the challenges Tesla has faced since that hype-filled day, Musk failed to appear at any public events during this year’s show that has been happening all week in Shanghai. Read Full Post…
Bottom line: Solar products maker Tianwei is likely to get a government bailout before it defaults on an upcoming bond payment, while a massive 2 GW solar farm being built by a new private equity fund is likely to get completed.
Tianwei struggles under huge debt
Two solar news items are drawing attention to both the opportunities and challenges facing this increasingly schizophrenic sector in China. A new mega-project is spotlighting the huge opportunities for new construction in the space, with word that a recently launched private equity fund plans to build a massive solar farm with a whopping 2 gigawatts of capacity. But big challenges are also apparent in another story, which says mid-sized player Baoding Tianwei is on the cusp of defaulting on a bond interest payment as it faces a cash crunch due to falling prices. Read Full Post…
