Hanergy Working With ‘Unproven’ Solar Technology, BNEF Says
March 9, 2015
(Bloomberg) — Hanergy Thin Film Power Group Ltd., the solar company whose market value has swollen to $36 billion, is working with “unproven” technology and has disclosed few details about the work that underpins its valuation, according to Bloomberg New Energy Finance.In a six-page examination of the Hong Kong manufacturer’s operations, the London-based researcher said it’s been unable to find a detailed list of solar-power projects that would help explain why the company’s shares have risen fivefold in the past year.
“The main items of value for Hanergy Thin Film are the thin-film technologies, which are unproven in large-scale commercial production, and the project development pipeline in China,” Jenny Chase, lead solar analyst for BNEF, wrote in the note published Friday. “China is a large PV market. Hanergy Thin Film has disclosed very little about its participation in that.”
E-mails seeking comment on the BNEF report and sent to Hanergy Thin Film’s investor relations department and to PR ASIA Consultants Ltd., the outside public relations company handling media questions for the solar maker, weren’t immediately answered.
The BNEF remarks add to questions about Hanergy’s valuation. It’s now the largest solar company by market value, with a capitalization exceeding Japan’s Sony Corp. and the social media company Twitter Inc.
Charles Yonts, an analyst at CLSA Ltd., has said Hanergy’s value is “completely out of line with the sector,” and the Financial Times in January raised questions about the company’s accounting practices.
The surge of Hanergy’s shares made a billionaire of its founder, Li Hejun, who brushed aside concerns about the company’s valuation when approached at a meeting in Beijing on Friday. Hanergy, he said, “will thoroughly overturn the application measure of traditional energy.”
Founded in 1994, Hanergy began as an operator of hydroelectric power plants before turning to thin-film solar in 2009. It operates in a niche in the photovoltaic industry, which mostly uses a different technology based on crystalline silicon.
Chase quoted exchanges with Allen Chen, Hanergy’s senior vice president of brand management, noting that part of the increase in the share price is due to the transfer of convertible bonds into equity capital. Chen also said Hanergy Thin Film has a “deep pool” of investors from China channeling cash through the Shanghai market, according to the note.
Hanergy has “a few disclosed projects” under China’s Golden Sun program to support solar energy, “but a comprehensive list of Hanergy’s pipeline is not available,” Chase said.
She also called into question the company’s assertion that it can develop a solar-powered car that drives 80 kilometers to 100 kilometers (50 miles to 62 miles) on a four-hour charge.
“This looks quite ambitious,” Chase wrote. Assuming the panels have 20 percent efficiency, that would translate to about 1.2 kilowatts of photovoltaic power, while current electric cars use about 16 to 20 kilowatt-hours per 100 kilometers. “Presumably, the cars will be super-lightweight single-person vehicles rather than direct replacements for existing models.”
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