Regulator confirms investigation into Hanergy

Some of the questions about China’s Hanergy Thin Film’s stellar stock market performance were seemingly answered last week, as the company’s share price plunged 47% in less than one hour, slashing some US$18 billion of its market value. However, Hong Kong regulators still have many unanswered questions, having confirmed today an investigation is currently underway into the company.

The SFC statement, which Reuters has described as representing an “unusual step”, was made in light of Hanergy Chairman Li Hejun having denied that an investigation was underway. Reuters reports that Li Hejun had appeared on Chinese state television saying that reports of an investigation by the Securities and Future Commission (SFC) were “purely a rumor” and “absolutely impossible.”

Now that it is confirmed that an investigation into Hanergy is underway, it appears unlikely that the company’s shares will resume trading soon. Lead solar analyst for Bloomberg New Energy Finance Jenny Chase says that she was “exactly zero percent surprised” that Hanergy Thin Film’s stock crashed the way it did.

“I am curious as to when this company will begin trading again, if ever,” Chase told pv magazine. “There are a couple of firms, like Trony Solar [Holdings Company], that has had its shares suspended for a very long time. And if there is some kind of investigation going on in Hong Kong it is difficult to know when any results will be out.”

Reuters reports that the SFC investigation into Hanergy is likely to get to the bottom the company’s five-fold share price increase since September 2014 and potential market manipulation that may have taken place.

On the back of the massive increase in market valuation, particularly compared to more established PV players such as First Solar, BNEF’s Chase was joined by CLSA analyst Charles Yonts and the Financial Times in raising doubts as to what was underpinning the soaring share price.

The July edition of pv magazine will investigate Hanergy’s history in the solar industry and the attempts by Chase, Yonts and others to get to the bottom of the company’s valuation and then crash.