Comments of people should not be taken too serious if they are heavily vested.
From my previous posting on Hanergy, the suspended solar energy company:
[Chairman and majority shareholder] Li also told Xinhua that the company was putting on extra shifts at its plants. “We’re in big production. It’s very, very, very good. Hanergy is in the best shape since it started,” he said.
From Forbes: "Suspended Hanergy Thin Film's First-Half Profit Reverses To Loss"
Hanergy Thin Film Power, the Hong Kong-listed solar energy business whose shares have been suspended since May 20 when a plunge in their price wiped out $19 billion of market capitalization in minutes, yesterday posted a loss of HK$59.3 million, or $7.7 million, for the six months ended June 30. That compares with net income of HK$1.7 billion a year earlier.
Hanergy said the loss resulted in part from the suspension and termination of a majority of connected transactions between Hanergy and its parent company and affiliates, following what the Beijing-headquartered company said on July 16 was an expression of concern by Hong Kong’s securities regulator about their “large number” and the “ongoing viability of the group and its financial dependence” on the parent.
That does not sound like "very, very, very good" .....
Showing posts with label Hanergy. Show all posts
Showing posts with label Hanergy. Show all posts
Sunday, 30 August 2015
Sunday, 21 June 2015
Hanergy report (2)
In addition to my last writing about this subject, Bloomberg published an article:
What You Need to Know About the Company That Lost Nearly $19 Billion in 24 Minutes
The article details what actions the Hong Kong Securities & Futures Commission can take, and how long things might take.
Hanergy Chairman Li is definitely one to follow, he seems to have a curious sense of humour.
First he told Xinhua News Agency in an interview days after the stock halt that reports of a regulatory probe were “purely rumor.” The SFC issued a statement about the probe after the Xinhua story ran.
Li also told Xinhua that the company was putting on extra shifts at its plants. “We’re in big production. It’s very, very, very good. Hanergy is in the best shape since it started,” he said.
I strongly doubt the above is based on any sense of realism. Investors in Hanergy should conservatively write off their full investment, an outcome better than that should be treated like winning the lottery.
What You Need to Know About the Company That Lost Nearly $19 Billion in 24 Minutes
The article details what actions the Hong Kong Securities & Futures Commission can take, and how long things might take.
Hanergy Chairman Li is definitely one to follow, he seems to have a curious sense of humour.
First he told Xinhua News Agency in an interview days after the stock halt that reports of a regulatory probe were “purely rumor.” The SFC issued a statement about the probe after the Xinhua story ran.
Li also told Xinhua that the company was putting on extra shifts at its plants. “We’re in big production. It’s very, very, very good. Hanergy is in the best shape since it started,” he said.
I strongly doubt the above is based on any sense of realism. Investors in Hanergy should conservatively write off their full investment, an outcome better than that should be treated like winning the lottery.
Tuesday, 2 June 2015
Hanergy report
I noticed a report about Hanergy that is interesting enough to mention here.
David Webb noted regarding the SFC investigation: "this refers to an investigation "into the affairs of" Hanergy, not just into dealings in its shares. In our view the suspension of the stock is now likely to continue for quite a while."
And writing about David Webb, there seems to be a call for more "David Webbs", lets hope this call will be answered:
Financial circles have mixed perceptions about activist investors like David Webb. Individual players hail him as their hero, as he is always there to press corporate management to share profits with minority shareholders.
Surely corporate decision makers and major stakeholders find him annoying. Who would like to have a “troublemaker” like Webb meddling in their business?
But a consultation paper from the Securities and Futures Commission on the Principles of Responsible Ownership is encouraging more Webb-like shareholders, especially institutional ones, to take part in and supervise the day-to-day operations of the firms they invest in.
David Webb noted regarding the SFC investigation: "this refers to an investigation "into the affairs of" Hanergy, not just into dealings in its shares. In our view the suspension of the stock is now likely to continue for quite a while."
And writing about David Webb, there seems to be a call for more "David Webbs", lets hope this call will be answered:
Financial circles have mixed perceptions about activist investors like David Webb. Individual players hail him as their hero, as he is always there to press corporate management to share profits with minority shareholders.
Surely corporate decision makers and major stakeholders find him annoying. Who would like to have a “troublemaker” like Webb meddling in their business?
But a consultation paper from the Securities and Futures Commission on the Principles of Responsible Ownership is encouraging more Webb-like shareholders, especially institutional ones, to take part in and supervise the day-to-day operations of the firms they invest in.
Friday, 29 May 2015
Hanergy: SFC is investigating
It seems that the SFC has started an investigation in the remarkable rise and fall of Hanergy, according to this article in The Financial Times. Some snippets:
Hong Kong’s securities watchdog has confirmed Hanergy is under investigation — hours after the troubled solar panel maker’s chairman dismissed any such probe as “purely rumour”.
In the interview with Xinhua, China’s official news agency, Mr Li lashed out at reports that followed the spectacular crash of its share price, which wiped nearly $19bn off Hanergy’s market capitalisation.
He said: “We can say that in Hanergy has never in its history been better than it is today, our business is prospering, and this is a great time for Hanergy.”
In his interview Mr Li said it was impossible for any investigation to be under way without his knowledge — a sentiment undermined by the SFC statement.
“This is purely rumour, there is no such possibility,” he said. “I would be the first to know if the authorities were really planning a probe. But I know nothing about such news.”
Mr Li, in the Xinhua interview, also appeared to address concerns that he had used shares of the company as collateral to secure loans, saying the company did not owe overdue bank loans or interest payments to any bank.
“We never did before, we don’t now and I believe we won’t in the future,” he said.
If those statements are "entirely true", I have strong doubts about that, time will tell. The stock is still suspended.
In the mean time, at least one complaint has been filed in Hong Kong, by none other than David Webb.
Hong Kong’s securities watchdog has confirmed Hanergy is under investigation — hours after the troubled solar panel maker’s chairman dismissed any such probe as “purely rumour”.
In the interview with Xinhua, China’s official news agency, Mr Li lashed out at reports that followed the spectacular crash of its share price, which wiped nearly $19bn off Hanergy’s market capitalisation.
He said: “We can say that in Hanergy has never in its history been better than it is today, our business is prospering, and this is a great time for Hanergy.”
In his interview Mr Li said it was impossible for any investigation to be under way without his knowledge — a sentiment undermined by the SFC statement.
“This is purely rumour, there is no such possibility,” he said. “I would be the first to know if the authorities were really planning a probe. But I know nothing about such news.”
Mr Li, in the Xinhua interview, also appeared to address concerns that he had used shares of the company as collateral to secure loans, saying the company did not owe overdue bank loans or interest payments to any bank.
“We never did before, we don’t now and I believe we won’t in the future,” he said.
If those statements are "entirely true", I have strong doubts about that, time will tell. The stock is still suspended.
In the mean time, at least one complaint has been filed in Hong Kong, by none other than David Webb.
Saturday, 23 May 2015
Chairman "had something to do", company down USD 19 Billion (2)
For those readers who might not yet fully realize what has happened with Hanergy and who might think there is still hope, Bronte Capital wrote an article with the rather clear title:
"Hanergy: let there be no doubt".
"There has been much press that compares Hanergy to other solar companies and suggests there may be disruptions in the market for panels. Garbage I say. The right comparison is Sino Forest or Longtop Financial Technology.
Hanergy barely existed."
With Sino Forest and Longtop being two of the largest scandals of China-listed companies.
Zerohedge wrote:
"How China's (Formerly) Richest Man Destroyed His Own Fortune When He Tried To Sell A Stock".
"Hanergy: let there be no doubt".
"There has been much press that compares Hanergy to other solar companies and suggests there may be disruptions in the market for panels. Garbage I say. The right comparison is Sino Forest or Longtop Financial Technology.
Hanergy barely existed."
With Sino Forest and Longtop being two of the largest scandals of China-listed companies.
Zerohedge wrote:
"How China's (Formerly) Richest Man Destroyed His Own Fortune When He Tried To Sell A Stock".
Wednesday, 20 May 2015
Chairman "had something to do", company down USD 19 Billion
Losing a few Billion, it can happen to the best, but losing USD 19 Billion in 24 Minutes, that is pretty tough, even if it is just paper value.
The company in question is Hanergy Thin Film Solar Group Ltd., listed in Hong Kong.
FT reported:
“Chairman Li [chairman and majority shareholder] did not attend the AGM,” said T.L. Chow, an external spokesman for Hanergy. “He had something to do.”
FT has written several times about this company, for instance about its suspicious group structure and the frequent trading between holding company and subsidiary:
FT also reported about the remarkable rise of the share price in the last ten minutes of each trading day (which used to be for years a familiar pattern in the Malaysian context):
David Webb also warned about bubbles and suspicious accounting practices:
Hanergy accounts for revenue and profits on a "percentage of completion basis", which is earlier than actual invoicing. At 30-Jun-2014, Hanergy had net tangible assets of HK$8,023m, of which $4157m was gross amounts due from contracts with Hanergy Affiliates (revenue which had not been billed) and $1914m was receivables from Hanergy Affiliates. It had also made prepayments to Hanergy Affiliates of $1540m for photovoltaic modules for solar power plants (Hanergy is going downstream), most of which had not been delivered. Add that all up and you see that $7611m, or 95% of the net tangible assets, are accounts with Hanergy's parent group. So not only is Hanergy in a bubble at 15 times its NTAV, but most of the NTAV depends on its parent group not defaulting. The listed company pays its parent in advance, but gets paid in arrears, heavily supporting its parent.
Bloomberg reported that shorting of speculative shares can horribly backfire:
Short sellers bowed out on Hanergy Thin Film Power Group Ltd. at just the wrong time.
Wagers against the Chinese solar-panel maker fell to 3.1 percent of its outstanding shares on Monday, the lowest level since December 2013, just before the stock slumped 47 percent in 24 minutes on Wednesday in Hong Kong to erase about $19 billion of value. Short interest dropped from 2014’s high of 5.1 percent, data compiled by Markit Group Ltd. show, as bears capitulated amid a 162 percent gain in the stock this year.
“Those who shorted Hanergy in the past got squeezed because it kept going up,” Andrew Sullivan, head of sales trading at Haitong International Securities Group, said in Hong Kong. “While there was a wall of money supporting the stock, it was very difficult to short.”
The company in question is Hanergy Thin Film Solar Group Ltd., listed in Hong Kong.
FT reported:
“Chairman Li [chairman and majority shareholder] did not attend the AGM,” said T.L. Chow, an external spokesman for Hanergy. “He had something to do.”
FT has written several times about this company, for instance about its suspicious group structure and the frequent trading between holding company and subsidiary:
FT also reported about the remarkable rise of the share price in the last ten minutes of each trading day (which used to be for years a familiar pattern in the Malaysian context):
David Webb also warned about bubbles and suspicious accounting practices:
Hanergy accounts for revenue and profits on a "percentage of completion basis", which is earlier than actual invoicing. At 30-Jun-2014, Hanergy had net tangible assets of HK$8,023m, of which $4157m was gross amounts due from contracts with Hanergy Affiliates (revenue which had not been billed) and $1914m was receivables from Hanergy Affiliates. It had also made prepayments to Hanergy Affiliates of $1540m for photovoltaic modules for solar power plants (Hanergy is going downstream), most of which had not been delivered. Add that all up and you see that $7611m, or 95% of the net tangible assets, are accounts with Hanergy's parent group. So not only is Hanergy in a bubble at 15 times its NTAV, but most of the NTAV depends on its parent group not defaulting. The listed company pays its parent in advance, but gets paid in arrears, heavily supporting its parent.
Bloomberg reported that shorting of speculative shares can horribly backfire:
Short sellers bowed out on Hanergy Thin Film Power Group Ltd. at just the wrong time.
Wagers against the Chinese solar-panel maker fell to 3.1 percent of its outstanding shares on Monday, the lowest level since December 2013, just before the stock slumped 47 percent in 24 minutes on Wednesday in Hong Kong to erase about $19 billion of value. Short interest dropped from 2014’s high of 5.1 percent, data compiled by Markit Group Ltd. show, as bears capitulated amid a 162 percent gain in the stock this year.
“Those who shorted Hanergy in the past got squeezed because it kept going up,” Andrew Sullivan, head of sales trading at Haitong International Securities Group, said in Hong Kong. “While there was a wall of money supporting the stock, it was very difficult to short.”
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