Hanergy (0566)

Bloomberg - A 24-Minute, $19 Billion Wipeout Threatens a Chinese Company's Solar Dream http://www.bloomberg.com/news/articles/2...s-to-earth

sent from my Galaxy Tab S

(21-05-2015, 09:17 AM)BlueKelah Wrote: Bloomberg - A 24-Minute, $19 Billion Wipeout Threatens a Chinese Company's Solar Dream http://www.bloomberg.com/news/articles/2...s-to-earth

sent from my Galaxy Tab S

To put the news in right perspective, I quoted the following. IMO, it is a typical market correction on an overly-priced stock. A fall of nearly half, after a triple, means it is still about 1.5x in 2015 y-t-d

"Li had become one of China’s richest men on paper after shares in his company nearly tripled in the first four months of the year, giving it a market capitalization of $40 billion at one stage. For comparison, the U.S.’s largest solar company, First Solar Inc. [fortune-stock symbol=”FSLR”], is worth $5.6 billion. But the company’s shares fell over 42% in the last half-hour of trading in Hong Kong Wednesday, before being suspended by the local market regulator."

http://time.com/3890491/hanergy-li-hejun/

(not vested)

The Chairman was missing in the AGM yesterday. That was the catalyst

Hope all chairmans and CEOs read this and not make an expensive mistake of skipping annual makan

(Bloomberg) -- Gravity works. Objects that fly too close to
the sun do get burned. The laws of physics apply. They just take
some time.
That must have been quite some annual meeting for Hanergy
shareholders yesterday. You go in the proud owners of a $40
billion company, and leave an hour or two later $18.6 billion
lighter. We’d like to have been a fly on the wall at that one.
What happened? Was it the non-appearance of chairman and
putative energy visionary Li Hejun? Or was Li’s failure to
attend the meeting at Hong Kong’s Kowloon Shangri-La hotel a
product of the same factor that caused the shares to collapse?
The shares were down a mere 5 percent at about 10:15 a.m.,
a quarter of an hour after the meeting was scheduled to start,
before dropping like a stone to be 47 percent lower by the time
the stock was suspended from trading 24 minutes later.
When was the last time a company lost that amount of market
value in that length of time? It’s one of many questions that
still swirl around the Hanergy enigma. One mystery has been
solved -- the solar panel-maker (apparently) isn’t worth $40
billion after all, as so many skeptics have said -- though
others arise in their place.
Why now? Yingli Green Energy, another Chinese solar panel
maker, slumped 37 percent in U.S. trading on Tuesday night,
adding to a 12 percent drop the previous day.
Yingli plunged after saying on Friday there was a
“substantial doubt” over its ability to remain in business.
The news may have soured investors on Chinese solar-company
prospects, though it’s unclear why that would necessarily affect
Hanergy, which has existed in its own alternate valuation
universe up to now. The plot thickened when Reuters reported
last night that Hong Kong’s market regulator has been
investigating Hanergy for several weeks for market manipulation.
The stock had climbed more than sixfold in the past year
before yesterday, in the face of short sellers, media articles
questioning the company’s “unconventional” accounting
practices and dependence on its parent for revenue, and baffled
attempts by analysts to make sense of the company’s valuation.
The trouble is, you can justify almost any price for a
stock by adjusting the underlying assumptions in a discounted
cash flow model. If Hanergy really has discovered the thin-film
panel secret sauce that no one else in the world has managed to
crack, who can say for sure it isn’t worth what the market said
it was. You know when the elastic is stretching, though.
At best, Hanergy’s technology is unproven. The industry is
littered with examples of companies that have developed the same
type of solar cells as Hanergy and ended in bankruptcy.
If Li’s absence was the trigger for the stock’s plunge, it
may yet recover. Chairmen going AWOL have been an ominous
indicator for Chinese companies in the past. That may be one
reason the company posted a statement after the suspension
saying that its chairman spoke at a clean energy exhibition in
Beijing yesterday. Maybe he’ll skip the next show and attend the
shareholders’ meeting instead.

When running on fumes, the stampede out the
door can be triggered by anything.

(21-05-2015, 10:26 AM)opmi Wrote: When running on fumes, the stampede out the
door can be triggered by anything.

Yes, I agree with you.

When speculators are hunting for "reason(s)" to exit, after the triple, anything can be the "reason(s)".

Some article on old 1993 Msia bull run. Same as HK & PRC now.


http://malaysiafinance.blogspot.sg/2007/...-have.html

Super Bull - Dejavu 1993?

While I have maintained my bullishness on global equities in general, the bullishness of the Malaysian markets have caught many by surprise, including myself. Having been through the 87 October crash (although to me I remembered it as the yen rally as I was working in Tokyo at that time) and the quite silly 93-94 super bull run in Malaysia/Asia, it makes for good comparison.

The 93 run was brought on by easy money from foreign investors seeking better returns. Call them hedge funds or cowboy funds or even astute international funds, but the 93-94 run was brought on by liquidity. Let's take the Malaysian example then. When you have good liquidity and the currency is looking strong, nothing seems to be able to go wrong. But the market was very maverick-driven, character-driven ... stocks associated with people will go very far and high. Plus it was very much retail driven. there were many days when we used to boast that our volume exceeded even the US markets. Looking back, thats when everyone should know its a false bull, and it will only take a prick to burst the bubble (pun intended).

The current run has its similarities, strong currency and deluge of foreign funds. However there are some remarkable differences - no more false volume, back then anyone could be buying or holding RM200,000 to RM500,000 of stock on contra with almost zilch in asset backing. The very shoddy risk management of the majority of broking houses allowed that to happen. I had 8 analysts under me then and every one of them was earning less than RM4,000 per month but were holding stocks on contra that had a market value of RM200,000 or more. That kind of scene was repeated at almost every level of society, magnified. So those days, markets were much more volatile owing to the 7-day itch and forced-selling and contango trades going wrong. You don't have that today, which adds quality to the rally, and also less volatility on the downside.

The 93 market went on a rampage sometime in March/April 93 and basically did not stop till January 94. Even then, the market was just waiting for a prick to come along to get itself out of its over-inflated misery. So, actually, not entirely right to blame the pricker but rather the timing was more than ripe, any kind of prick will do the job.

Were there some fundamentals back in 93, well yes kinda. Much like the present day. There is still a feeling of detachment from what is played out on our stock screens and what we can see and feel in daily biz life. Most will feel the real economy is actually not that hot, is it? But we have to remember also that the detachment is there because the stock market is a forward discounting tool and not an anal thermometer. Technically, we are supposed to get better days ahead.

The current rally is not character/maverick driven (thank god)... those old enough will remember the names of Teh Soon Seng (Shanghai calling), Sam (Africa did not like me), Repco Lau (still around), Tajuddin (retired hurt), Halim S (not all there but not out of it yet), etc... just the mention of a counter linked to them will send it limit up. There were many days when there were at least 3-4 counters going limit up, and the players take it all nonchalantly. Syndicate play has never been so easy. There are still syndicate plays in the current run but it is not as severe or arrogant. The other good thing is its driven more by fundamentals and research, rather than rumours and whispers. Glad to see many stocks recommended by research houses performing much better than generally expected. Its a good sign to have research higher up the ladder of priority and recognition. If not, we will stay in cowboy land for a much longer time.

Hence, if there were 4 stages to a super bull run, we are probably entering the early second stage only. Beware of corrections as there will be corrections in super bulls. Surprisingly, it is much better to stick close to technicals and study the support lines in correction phases of a super bull as many will be looking at the same thing, thus it generally will come true.

The biggest blessing I think about this time around is that players will find it very hard to be over-leveraged, at least most will be able to keep the bulk of their profits this time around. Used to be, it was easy to get 5x to 10x your net worth to play the stock markets. Now, you'd be lucky to get 1x, maybe some aggressive places you can get 2x. When you start to hear of places which will offer you 4x or 5x, you know its time to reduce your positions.

Posted by Salvador Dali at 10:06 AM

(21-05-2015, 11:20 AM)opmi Wrote: Some article on old 1993 Msia bull run. Same as HK & PRC now.


http://malaysiafinance.blogspot.sg/2007/...-have.html

Super Bull - Dejavu 1993?

nice article.

just like the blog says about pricking, do wonder if the Hanergy and Goldwin price crashes are the initial pricks that would burst the bubble in HKSE?

Yesterday's fall in shareprice of Hanergy (0566.HK) from $7.20 level to $3.91 level has wiped out HKD $150 Billion of shareholders wealth.

Today's fall in shareprice of Goldin Financial (0530.HK)from $30.85 to $17.98 level has wiped out HKD $88 Billion of shareholders wealth.

Today's fall in shareprice of Goldin Property (0283.HK)from $24.30 to $14.36 level has wiped out HKD $44 Billion of shareholders wealth.

So in theory, the total wealth lost is HKD $282 Billion in one day falls ...

(21-05-2015, 10:09 PM)soros Wrote: Yesterday's fall in shareprice of Hanergy (0566.HK) from $7.20 level to $3.91 level has wiped out HKD $150 Billion of shareholders wealth.

Today's fall in shareprice of Goldin Financial (0530.HK)from $30.85 to $17.98 level has wiped out HKD $88 Billion of shareholders wealth.

Today's fall in shareprice of Goldin Property (0283.HK)from $24.30 to $14.36 level has wiped out HKD $44 Billion of shareholders wealth.

So in theory, the total wealth lost is HKD $282 Billion in one day falls ...

Wonder which company will be next tomorrow. But most of all wonder who are the shortist, they must be "ROFL to the bank!"

To put in perspective, hongkong 2014 GDP was USD$274 Billion
HKD282b = ~USD36.37b

that's about 1.5months worth of GDP wiped out in a couple of days.

WOW!

Solar Panel Maker Suffering HK Share Sell-Off 'Failed to Repay Loans'
http://english.caixin.com/2015-05-21/100811386.html