Hanergy founder raises stake as shares soar

Hanergy Group founder Li Hejun has raised his holding in the company's Hong Kong-listed solar business, signalling confidence in its prospects even after a 180 per cent share price rise this year - and netting a $4.8m paper profit in less than a week.

Hong Kong-listed Hanergy Thin Film has come under scrutiny in recent months because of its soaring share price and the high level of sales it makes to its own parent company.

Shares in HTF have climbed 350 per cent in six months, making the solar equipment supplier the best performer in Hong Kong's Hang Seng Composite index.

But, in the past week, Mr Li has spent HK$264m ($33.9m) buying more HTF shares at between HK$6.9 and HK$6.92, according to regulatory filings with the Hong Kong Stock Exchange.

Hanergy Group did not immediately return a request for comment.

On Thursday, shares in HTF, which had traded tightly between HK$6.9 and HK$6.93 since April 16, jumped 14.2 per cent to close at HK$7.88, giving Mr Li a $4.8m paper profit on his latest investments in the company.

In another filing on Thursday, made at the request of the stock exchange, HTF said it knew of no reason for Thursday's increased price and trading volume, nor of any information that should be disclosed to the market.

Mr Li now holds a net 74.95 per cent of Hanergy's shares, according to the filings. Hong Kong requires that companies have at least a 25 per cent free float.

HTF's $42.2bn market capitalisation makes it worth six times its largest competitor - the US-listed First Solar - and worth more than the rest of the Chinese solar sector combined.

In addition to its stock market gains, HTF's considerable reliance on its parent company for sales has been questioned by analysts. HTF's parent - Mr Li's privately-held Hanergy Group - has then waited for long periods of time before settling the sales booked by its subsidiary.

HTF has said it has reduced its exposure to its parent in recent months, by signing contracts with third parties in mainland China to supply them with solar panel manufacturing equipment.

Each of the deals of this type that have been announced this year - with Macrolink, Baota Petrochemical Group, and Inner Mongolia Manshi Investment Group - have involved HTF issuing shares to the clients at a discount to their market value at the time.

The Macrolink and Manshi deals had the same value, or $660m each, Hanergy said, while the deal with Baota was valued at $1.32bn.

Last week, HTF announced a further deal with a thin film solar panel manufacturing and research base in collaboration with the government of Huangpi, the area just north of the central Chinese city of Wuhan.

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