Investors dump Trony shares after poor results

Investors yesterday punished Trony Solar, after the country's largest producer of thin-film solar panel modules reported worse than expected interim results, pushing its share price down as much as 10 per cent.

The Shenzhen company reported a net loss of 596.5 million yuan (HK$734.5 million) for the six months to December, compared to a profit of 261.9 million yuan a year earlier. Sales sank 32 per cent to 610.2 million yuan.

Trony shares fell as low as HK$1.16 before closing with a loss of 4.7 per cent at HK$1.23 - 73 per cent lower than its initial public offering price of HK$4.50 in October 2010.

Trony attributed the first-half loss to 611 million yuan in impairment charges for property, plant and equipment.

Chief financial officer Eric Chan Wing-chung said the losses were booked to reflect the assets' lower market value after a sharp fall in product prices in the last five months of last year. The company's gross profit margin fell to 20.8 per cent from 43.9 per cent.

'Our products' prices fell precipitously from July to December, with prices at new lows in December that resulted in gross losses,' Chan said. 'Due to overly low prices, we rejected many orders which accounted for some 40 per cent of our production requests.' Trony's average selling price fell 11 per cent to 10.30 yuan per watt. Shipments dropped 20 per cent to 59.2 megawatts.

'Unlike our rivals that have tight cash flow and are hungry for business, we have chosen not to produce at loss-making margins,' Chan said.