Bloomberg News

Xinyi Glass Postpones Xinyi Solar Listing on Volatile Market

November 17, 2011

(Adds analyst comments in fourth paragraph.)

Nov. 17 (Bloomberg) -- Xinyi Glass Holdings Ltd., a maker of glass for cars and home appliances in China, postponed the listing of its solar-energy unit because of turmoil in the global solar industry and capital markets.

The solar energy industry’s development “remains uncertain” because of “recent volatility in the global capital markets” and the European sovereign debt crisis, Xinyi Glass said in a statement to the Hong Kong Stock Exchange yesterday.

China’s solar energy companies are struggling with overcapacity and falling prices. About 90 percent of China’s polysilicon plants, making half the nation’s output, may suspend production because of the price slump, according to Xie Chen, an analyst at the China Nonferrous Metals Industrial Association, a conduit between the industry and the government.

“It’s the worst timing for solar companies to proceed with an initial public offering or for their shares to start trading,” Lynda Peng, a Beijing-based analyst from BOCOM International Holdings Co., said today by phone. “Stock prices have been plunging because margins are being cut by falling prices.” She expects prices to recover in the third quarter of next year.

Shares Falling

Shares of Suntech Power Holdings Co., the world’s biggest silicon-based solar module maker, and LDK Solar Co. have both lost more than 65 percent this year. Chinese solar-panel maker Trina Solar Ltd. cut its forecast for 2011 shipments on Nov. 3 because customers in Europe have had difficulty financing projects because of credit concerns and subsidy cuts.

Xinyi Solar Holdings Ltd., the world’s third-biggest maker of solar glass, was seeking as much as $150 million in an initial public offering in Hong Kong in December, two people with knowledge of the matter said on Nov. 8. In July, the company was seeking $300 million, two people said then.

The postponement “will not have material adverse effect on the business operations” of the group, Xinyi Glass said. It did not say when it will proceed with the IPO.

Shares of Xinyi Glass dropped 2.9 percent to HK$4.35 yesterday, before the announcement. The stock has fallen 32 percent this year, compared with the 18 percent decline in Hang Seng Index for the same period.

Xinyi Solar’s glass products are used to conserve energy in buildings. It had a 7 percent market share, third-most in the world, the company said in a filing to the Hong Kong stock exchange on Nov. 8. Citigroup Inc. and JPMorgan Chase & Co. were managing the offering, the people familiar with the matter said.

--With assistance from Feifei Shen in Beijing. Editors: Nicholas Wadhams, Baldave Singh

To contact the reporter on this story: Fion Li in Hong Kong at fli59@bloomberg.net

To contact the editor responsible for this story: Nicholas Wadhams at nwadhams@bloomberg.net


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