Hanergy reports H1 net profit of $105m

Solarcoaster regular and thin film aspirant Hanergy Thin Film has caused further industry ripples this week following the publication of first half (H1) 2016 financials that reveal a surprising return to profit.

Having seen $19 billion wiped off the company’s share value in 2015 when reports emerged that the firm’s business model was almost entirely reliant on selling equipment to its own parent company, Hanergy Thin Film (HTF) had its shares suspended on the Hong Kong Exchange, prompting former Chairman Li Hejun – briefly China’s richest man – to step down.

Since the tumult of those heady months, Hanergy’s troubles appeared to deepen as 2015 trundled on, the firm booking a HK$12.2 billion ($1.57 billion) net loss for the 2015 financial year, following reported profits of HK$3.2 billion in 2014.

From that low, however, comes Hanergy’s apparent revival – latest financials show net income for H1 of HK$821 million, with sales rising to HK$3.3 billion ($430 million) over that period.

This sharp uptick in revenue can be pinned on HTF’s apparently strong relationship with two key customers: Shandong Macrolink New Resources Technology – which accounted for HK$2.124 billion in sales (approx $274 million); and Hanergy Affiliates, which accounted for HK$447.37 million.

Combined, around 80% of HTF’s H1 revenue was derived from dealings with these two companies alone. The success of these sales relationships is even more stark when placed against other, ill-fated partnerships HTF has lost over the past 12 months, namely a supply deal with furniture giant Ikea that was canceled by the Swedish firm last year after reports about Hanergy’s alleged market manipulation emerged.

Indeed, in listing revenue generated by HTF’s sales to Macrolink, more eyebrows have been raised. In May, a proposed supply deal of 600 MW of BIPV production equipment from HTF to Macrolink was scrapped unexpectedly after HTF said that Macrolink had failed to fulfill a payment obligation that would have seen the firm stump up 80% of the reported $660 million due, while also agreeing to buy a 3.48% stake in HTF via the purchase of 1.5 billion new shares.

Despite the deal falling through, Hanergy stipulated that the "sales contract and the service contract" shall remain in full force and effect.

Sales to HTF’s parent company, Hanergy Holding Group, concern rooftop solar power systems and panel production, and over the past year revenue from this partnership has increased 14%.