Hanergy Working With ‘Unproven’ Solar Technology, BNEF Says

(Bloomberg) — Hanergy Thin Film Power Group Ltd., the
solar company whose market value has swollen to $36 billion, is
working with “unproven” technology and has disclosed few
details about the work that underpins its valuation, according
to Bloomberg New Energy Finance.

In a six-page examination of the Hong Kong manufacturer’s
operations, the London-based researcher said it’s been unable to
find a detailed list of solar-power projects that would help
explain why the company’s shares have risen fivefold in the past

“The main items of value for Hanergy Thin Film are the
thin-film technologies, which are unproven in large-scale
commercial production, and the project development pipeline in
China,” Jenny Chase, lead solar analyst for BNEF, wrote in the
note published Friday. “China is a large PV market. Hanergy
Thin Film has disclosed very little about its participation in

E-mails seeking comment on the BNEF report and sent to
Hanergy Thin Film’s investor relations department and to PR ASIA
Consultants Ltd., the outside public relations company handling
media questions for the solar maker, weren’t immediately

The BNEF remarks add to questions about Hanergy’s
valuation. It’s now the largest solar company by market value,
with a capitalization exceeding Japan’s Sony Corp. and the
social media company Twitter Inc.

Charles Yonts, an analyst at CLSA Ltd., has said Hanergy’s
value is “completely out of line with the sector,” and the
Financial Times in January raised questions about the company’s
accounting practices.

Billionaire Founder

The surge of Hanergy’s shares made a billionaire of its
founder, Li Hejun, who brushed aside concerns about the
company’s valuation when approached at a meeting in Beijing on
Friday. Hanergy, he said, “will thoroughly overturn the
application measure of traditional energy.”

Founded in 1994, Hanergy began as an operator of
hydroelectric power plants before turning to thin-film solar in
2009. It operates in a niche in the photovoltaic industry, which
mostly uses a different technology based on crystalline silicon.

Chase quoted exchanges with Allen Chen, Hanergy’s senior
vice president of brand management, noting that part of the
increase in the share price is due to the transfer of
convertible bonds into equity capital. Chen also said Hanergy
Thin Film has a “deep pool” of investors from China channeling
cash through the Shanghai market, according to the note.

Hanergy has “a few disclosed projects” under China’s
Golden Sun program to support solar energy, “but a
comprehensive list of Hanergy’s pipeline is not available,”
Chase said.

Solar Car

She also called into question the company’s assertion that
it can develop a solar-powered car that drives 80 kilometers to
100 kilometers (50 miles to 62 miles) on a four-hour charge.

“This looks quite ambitious,” Chase wrote. Assuming the
panels have 20 percent efficiency, that would translate to about
1.2 kilowatts of photovoltaic power, while current electric cars
use about 16 to 20 kilowatt-hours per 100 kilometers.
“Presumably, the cars will be super-lightweight single-person
vehicles rather than direct replacements for existing models.”

To contact the reporter on this story:
Reed Landberg in London at

To contact the editors responsible for this story:
Reed Landberg at
Will Wade, Iain Wilson

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