(Yicai Global) April 25 — Sunshine Group’s stock price closed 6.3 percent lower, after soaring this morning, amid concerns about the size of a planned CNY20 billion (USD3.1 billion) investment by the Chinese clothing maker in solar power-related projects and a wider slump in the Shanghai stock market.
Sunshine’s shares [SHA: 600220] ended today at CNY2.98 (45 US cents) each, after opening up 7.5 percent at CNY3.42. The benchmark Shanghai Composite Index lost 5.1 percent.
Sunshine plans to build a polycrystalline silicon production line with an annual capacity of 100,000 tons, a 10-gigawatt single-crystal pull rods plant, and another project with an annual capacity of 10 GW of battery cells and modules, the firm said on April 23, citing the investment agreement signed with the government of Baotu in China’s northern Inner Mongolia Autonomous Region.
The plan marks the first time that the Jiangsu province-based manufacturer of wool textiles and apparel has attempted to enter the solar energy industry chain, which may bring more risks to the projects. A funding plan also is not yet finalized, Sunshine said, noting that it may pressure the firm’s cash flow, as the investment far exceeds the amount of cash on hand.
The company also plans to build solar power stations with a combined electricity generation capacity of 10 GW in Baotu in the future, it noted.
Editor: Futura Costaglione