The following press releases and news reports about China companies were carried on October 12. To view a full article or story, click on the link next to the headline.
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Yum (NYSE: YUM) Details Transformation Plans after China Separation (Businesswire)
SF Express Backdoor Listing Plan Approved by China Securities Regulator (Chinese article)
NetEase (Nasdaq: NTES) Breaks into Smart Device Market (English article)
Solar Panel Maker LDK Bankruptcy Approved; Creditors Take Huge Losses (English article)
Shanyang (Shanghai: 600146) Buys US Apparel Brand Oneworld Star for $280 Mln (Businesswire)
Bottom line: The large premium being offered in Trina Solar’s new buyout reflects a recent flood of private equity chasing privatization deals for US-listed Chinese firms, and could breathe new life into many previously announced bids that have become dormant.
Trina gets rich buyout offer
The homeward migration by US-listed Chinese firms has taken a turn into the new energy sector, with solar panel maker Trina (NYSE: TSL) becoming the first major player in the space to announce a management-led buyout offer. Throughout the current round of buyouts that has seen some 3 dozen US-listed Chinese companies announce privatization bids this year, few have come in the new energy sector that includes about a half dozen of China’s top solar panel makers listed in New York.
That’s not to say that New York has been a comfortable place for these companies. Most of the big names saw their shares soar in their first few years in New York, only to watch them tumble between 2011 and 2013 as panel prices plunged due to massive oversupply. That downturn saw the departure of 2 of the sector’s biggest names from Wall Street, though the exit of Suntech and LDK was prompted by bankruptcy rather than privatization. Read Full Post…
Bottom line: The bankruptcy of Tianwei signals Beijing will allow a new round of failures for weaker solar panel makers, with YIngli and ReneSola the most likely to come under pressure.
Future looks bleak for Tianwei
News that solar panel material maker Baoding Tianwei is on the brink of collapse has sent shudders through the entire sector, as everyone guesses who might be next to fall in a looming new clean-up of China’s bloated industry. Tianwei has been in trouble for a while now, after the company became the first state-run firm to ever default on a domestic bond interest payment back in April.
That development certainly didn’t bode well for Tianwei, but it remained unclear if the local government or Beijing would ultimately step in to bail out the company and save its investors. Now we finally have the answer to that question, following media reports that Tianwei and 3 of its business units are formally filing for bankruptcy. (English article; Chinese article) Read Full Post…
Bottom line: China is likely to see 1-2 of its weakest major solar panel makers close over the next year in a campaign led by Beijing, with Yingli as the most likely candidate to make the first exit.
Yingli’s star grows dimmer
A couple of new reports from the Chinese solar sector are shining a spotlight on consolidation that’s still needed before the industry can return to health. One report cites the Ministry of Industry and Information Technology (MIIT), the sector regulator, saying more such consolidation is necessary and the pace should accelerate. The second is a technical announcement from Yingli (NYSE: YGE), the weakest among China’s major panel makers, saying it has fallen out of compliance with US listing requirements due to its low stock price.
The appearance of these 2 news items on the same day is purely coincidence, even though both are related to the same phenomenon. That phenomenon saw global solar panel production explode over the last decade, as scores of new plants opened in China in response to policy directives and other incentives from Beijing. 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: 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 year-end rush of Chinese IPOs will include mostly second-tier firms seeking to capitalize on positive market sentiment, leading to weak pricing and delayed trading debuts.
eHi IPO delayed
The year-end rush of IPOs that I’ve been predicting has hit a speed bump, with word that one offering set to debut last week has been delayed and a second has been scaled back dramatically. The first piece of news saw car rental specialist eHi (NYSE: EHIC) unexpectedly delay its offering at the last minute, reportedly after the company came under suspicion of submitting false information in some of its earlier IPO filings. Meantime, Sky Solar Holdings (Nasdaq: SKYS) had to dramatically scale back its planned US listing after meeting with lukewarm demand, as it became the first solar panel-linked company to make a US listing in 4 years. Read Full Post…
Just months after tapping financial markets for nearly $250 million, solar panel maker Trina (NYSE: TSL) has just announced another plan to raise a similar amount as it tries to take advantage of improving sentiment towards its sector. Such fund-raising would have been unthinkable as recently as a year ago, when recovery of the solar panel sector was far from certain following a prolonged downturn. In a relatively positive sign, Trina’s latest fund-raising plan didn’t trigger a major sell-off in its shares, indicating investors are more confident of the company’s and the sector’s future prospects. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 2-4. To view a full article or story, click on the link next to the headline.
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Mercedes-Benz (Frankfurt: DAI) Lowers After-Sales Spare Parts Prices 15 Pct In China (Chinese article)
China Revamps Everbright Group In State Business Shake-Up (English article)
LDK Solar (NYSE: LDK) Secures Funding Commitments for Its Offshore Restructuring (PRNewswire)
China Mobile Payment Users Reaches 125 Mln, Up 126 Pct Year-On-Year (Chinese article)
Kabam, Alibaba Team Up In Mobile Game Alliance In China (Businesswire)
The war of words against Chinese solar panel makers is heating up from both sides of the Atlantic, with growing signs that Europe may reconsider anti-dumping duties as the US moves closer to imposing its own new duties on the beleaguered manufacturers. Meantime, 2 of the biggest Chinese victims of the sector’s recent turmoil have risen from the ashes, with LDK and Suntech both announcing new moves more than a year after each became insolvent. Among those 2 moves, LDK’s looks the most worrisome, potentially bringing major new volumes of polysilicon, the main ingredient in solar panel production, back into a market whose current recovery is still quite weak. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 31. To view a full article or story, click on the link next to the headline.
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Chinese Vendors Outpace Market As Smartphone Shipments Grow 23.1% In Q2 – IDC (Businesswire)
EU/China Solar Deal Offers No Dumping Protection: EU Producers (English article)
