Hanergy Thin Film (HTF) was the world’s biggest solar company by market capitalisation. Prior to its suspension in May 2015, the share price had risen around 600% over the previous year; then almost halved in just half an hour. The FT had already highlighted that most of the gains occurred in the final few minutes of trading, although this had little immediate impact on the share price.
Most of the company’s revenue was from related parties in the Hanergy Group at very high margins; in 2014, its gross margin was 57%. However, a substantial amount of the revenue remains unpaid and doubts exist about whether they. At the end of 2016 HK$5bn was outstanding, while a further HK3bn from another customer. E&Y issued a qualified audit report in relation to the 2015 and 2016 financials due to doubts about the recoverability of these balances. Part of the outstanding balances have been paid since the year end although the amounts due remain significant. The company reported a loss of HK$12.2bn in 2015 compared to a profit of HK$3.2bn in 2014, following the writedown of goodwill and other assets. In 2016, profits were just HK$252m. Shareholders’ equity was just HK$7bn.
Hanergy’s shares remain suspended. The SFC is seeking disqualification orders against the former Chairman, Li Hejun, and four independent non-executive directors. However, Mr Li remains its controlling shareholder.
 Hanergy: DISCUSSIONS WITH THE SECURITIES AND FUTURES COMMISSION ON RESUMPTION OF TRADING, 23 January 2017
Hanergy: Annual Report 2015