With the share price of Chinese solar companies following the rest of the market by tanking, Hong Kong-based developer United Photovoltaics Group has had a shot in the arm from its major shareholder a state-owned company.
An update on the Hong Kong Stock Exchange yesterday (Thursday) revealed United PV‘s major shareholder, China Merchants New Energy Group Ltd, had boosted its shareholding by an additional 6,306,000 shares.
China Merchants New Energy (CMNE) is a subsidiary of the state-owned China Merchants Group which, according to United PV’s website, has a 24.09 per cent holding in the developer. It is not clear whether that figure includes the new shareholding, acquired for an average price of HK$0.87 ($0.11) per share. If not updated, the new acquisition, would account for an additional 4.2 per cent of the company.
Reasons for the expanded shareholding
A statement on United PV’s website outlined the reasons for its state-sponsored benefactor’s move, stating: "CMNE is positive towards United PV’s future development and revenue growth, given its low price-earnings ratio, high margin of safety and strong cash position.
"It is believed that the gradual growth environment of this listed company has given its shareholders a precious opportunity to raise their stakes for better returns.
"Upon completion of the increase in shareholdings, CMNE might seek to further increase its stake in United PV through a number of ways going through the Hong Kong Exchanges and clearing limited."
United PV’s share price has mirrored the woes of the wider Chinese market this month, rallying HK$0.09 ($0.01) this morning to HK$0.99 ($0.13) from a 52-week-high of HK$1.57 ($0.20), on June 2.