HONG KONG—On the day Li Hejun
lost roughly $14 billion, he was skipping his company’s annual meeting
to attend what it said was a clean-energy exhibition in Beijing.
That company, Hanergy Thin Film Power Group Ltd., which Mr. Li
controls, saw its shares plunge nearly 50% on Wednesday before trading
was halted. Mr. Li, who at one time was considered China’s richest man
based on the value of his majority stake in the Chinese solar company,
saw his holdings suffer accordingly.
The Wednesday decline was
followed on Thursday by a similarly steep fall in Goldin Financial, a
broker that provides short-term corporate financing to firms and had
been an advisor to Hanergy Thin Film. Goldin fell 43%, wiping $12
billion off its market value. A smaller company with the same owner,
property developer Goldin Properties, fell by 41%, reducing its market
capitalization by $4.6 billion.
The pain from these violent falls
is stinging investors, especially those in exchange-traded funds
focused on China’s energy sector.
For mainland Chinese investors, it has been particularly painful:
Credit Suisse estimates that money from the mainland into Hong Kong has
surged in recent months to reach $748 billion in April. Hong Kong’s Hang
Seng Index has gained 17% year to date, trailing a 37% gain in the
Shanghai Composite Index. All three companies had made meteoric rises over the past year with industry watchers troubled by their sudden rallies.
“These
companies are bubbles,” said David Webb, a Hong Kong
corporate-governance activist. “They still have a long way to fall
before they can reflect their fundamental values.”
China’s
Hanergy Holding Co. has denied that it was behind Wednesday’s sharp
selloff in its Hong Kong-listed subsidiary and said it was operating
normally. Beijing-based Hanergy Holding, which controls Chinese
solar-panel producer Hanergy Thin Film, said in a statement Thursday
that the company was financially healthy.
“Our group currently
operating normally, all the business operations are running well and the
capital situation is fine,” Hanergy Holding said.
Before
Wednesday’s plunge, solar-panel producer Hanergy Thin Film’s shares had
seen a meteoric rise, making the stock one of the Hong Kong market’s
best performers. Even after the slump, Hanergy’s shares as of
Wednesday’s halt were up more than 42% since the beginning of the year
and are more than triple their level of one year ago.
Analysts have widely said the shares were overvalued.
Hanergy
previously had a lower profile. Until the recent run-up, it traded
mostly below two Hong Kong dollars a share and was viewed as a
relatively minor appendage of Hanergy Holding Group Ltd., a large
Beijing-based renewable energy company that became the unit’s majority
shareholder in 2013.
The company’s major product is known as solar
thin-film technology, which features thin, flexible panels that could
be attached to walls or gadgets or even worn on clothing. Thin-film
panels are cheaper to produce but less efficient in converting sunlight
to energy. As a result, they make up less than 10% of the overall
market, which is dominated by solar panels based on crystalline silicon.
Filings
with the Hong Kong exchange show Hanergy and Goldin Financial have
previously worked together, although it was unclear whether the
relationship contributed to Goldin’s fall. Hanergy said in a February
disclosure it had appointed Goldin as an independent adviser for a
supply agreement under which Hong Kong-listed Hanergy Thin Film would
sell solar panels to its parent company.
The Securities and
Futures Commission, Hong Kong’s market regulator, warned investors to
exercise “extreme caution” with Goldin Financial in March, noting that
just 20 shareholders—including its chairman who owns a 70% stake—held
nearly 99% of the company. The company said at the time that there was
little it could do because the SFC didn’t disclose who those
shareholders were.
Both Goldin Financial and Goldin Properties
issued filings Thursday to the Hong Kong market saying they are not
“aware of any reasons” for the movement of the stocks. The companies
didn’t respond to requests for comment.
Mr. Li of Hanergy, 47
years old and a member of China’s Hakka ethnic group, was born in
China’s southern Guangdong province. He initially began building and
acquiring small dams in his home region, according to a biography on
Hanergy’s website. Later the company built the Jinanqiao Dam in
southwestern Yunnan province, which helped give Hanergy the financial
foundation it needed to expand.
Since then Mr. Li has focused on solar, which is at the center of what he touts as a coming clean-energy revolution.
Mr.
Li added to his bet on solar during Hanergy Thin Film’s run-up.
Employees and others within Hanergy exercised about 93 million options
between December and April, with many cashing in on options redeemable
for about 17 and 25 Hong Kong cents. But Mr. Li in the fourth quarter of
last year acquired more than 190 million shares, according to data
provider FactSet. Over the last two months he added another 62.2 million
Hanergy Thin Film shares to his holdings, according to Hong Kong stock
exchange filings, giving him roughly 30 billion shares. He now owns
roughly four-fifths of the company’s shares.
In “China’s New
Energy Revolution,” Mr. Li predicted that clean energy would make up
half of primary energy usage in the world by 2035. That is an aggressive
prediction compared with others. BP PLC, which compiles energy data
that the industry relies upon, predicts non-fossil fuels including
nuclear and hydropower will account for 38% by then, compared with 32%
in 2013.
Mr. Li is a member of the Chinese People’s Political
Consultative Conference, an advisory body that meets annually along with
the National People’s Congress, China’s legislature. At the most recent
meeting, he called for China to embrace what he called mobile energy—a
new generation of gadgets powered with lightweight solar material like
Hanergy’s thin-film technology.
“The country should attach
importance” to the growing industry, he said, according to a CPPCC
official account. He urged officials to “treat it as a competitive
Chinese industry as it has with high-speed railway or the water and
electricity industries.”
Balloons made by the 'ONE' campaigning organization depicting leaders of
the countries members of the G7 are seen in front of the Frauenkirche
cathedral in Munich, Germany on May 27, 2015. Dresden hosts the G7
meeting of finance ministers and central bankers. The balloons show
Japanese Prime Minister Shinzo Abe (R), British Prime Minister David
Cameron (5th L), French President Francois Hollande (2nd R), German
Chancellor Angela Merkel (4th L), U.S. President Barack Obama (2nd L),
Italian Prime Minister Matteo Renzi (3rd L) and Canadian Prime Minister
Stephen Harper (L).
Sloane Stephens ended fellow American Venus Williams's
18th French Open at the first-round stage with a 7-6 (7/5), 6-1 victory
on Monday.
2015 French Open
Hull City were relegated from the Premier League on
Sunday after drawing 0-0 at home to Manchester United on a final day
marked by high scores and high-profile departures.
The Golden State Warriors took a
3-0 series lead over the Houston Rockets Saturday, and in the process
earned boxer Floyd Mayweather $200,000. Mayweather, who frequently bets
six-figure sums on basketball (but rarely posts losing tickets), put
$200,000 on the Warriors and doubled his money. One week ago, Mayweather
claimed to win more than $800k on various bets. 
JERUSALEM — One of the earliest known copies of the Ten Commandments
was written in soot on a strip of goatskin found among the trove of
biblical material known as the Dead Sea Scrolls, widely considered to be
one of the great archaeological finds of the 20th century.
Life is good at the top of the food chain. If you really wanted to (and don’t mind the risk of being mauled or thrown in jail), you could eat basically any other animal in existence. Heck, we’ve even figured out how to eat toxic animals, like puffer fish. But contrary to what you might have heard, they don’t all taste like chicken. We did some research, and learned what five exotic animals actually taste like when cooked properly.
