Hanergy Thin Film suspends trading after stock plunges 47%

Hanergy Thin Film Power Group Ltd, the Chinese solar equipment maker controlled by Li Hejun, suspended trading in Hong Kong after the stock plummeted 47 percent in morning trading.

The stock fell to HK$3.91 before the suspension at 10:40 am, shaving HK$144.3 billion ($18.6 billion) off its market value, on the day of its annual general meeting in Hong Kong.

Before Wednesday's decline, the stock had surged more than six-fold in the past year despite questions from analysts and investors about the company's revenue sources. About 61 percent of Hanergy Thin Film's sales derive from Beijing-based parent Hanergy Holding Group, the listed company said in March.

The company's first statement on Wednesday did not give a reason for the suspension.

A subsequent statement from Hanergy said the stock has been suspended pending "an announcement containing inside information".

Hanergy uses a niche technology in the photovoltaic industry, where more than three quarters of all panels are based on solar-grade silicon.

Thin film cells are more flexible but less efficient than crystalline silicon-based panels.

Prior to Wednesday's plunge, Hanergy Thin Film's market value had at one point risen to more than HK$300 billion. That is larger than Japan's Sony Corp and almost seven times the size of First Solar Inc, the biggest US solar company.

The run-up in Hanergy's shares has not been without questions.

"It's an adjustment that the market has been waiting to happen, as Hanergy's earnings and business performance didn't support such a high stock price or valuation," said Gong Siwen, Shanghai-based analyst at Northeast Securities Co.

The Chinese solar company was the subject in January of an investigation by the Financial Times newspaper, which questioned its "unconventional" accounting practices.

A Feb 27 report from analysts Charles Yonts and Johnny Lau at CLSA Asia-Pacific Markets in Hong Kong raised more skepticism, saying the stock was wildly inflated.