Meaningless Metric: Hanergy Thin Film’s 1H 2016 sales

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Hanergy TF claimed first half 2016 revenue reached around US$425 million.

PV thin-film equipment and module producer Hanergy Thin Film Power Group (Hanergy TF) has claimed to have bounced back from a non-cash loss of around US$1.58 billion in 2015 to a first half 2016 net profit of around US$105.8 million.

Hanergy TF claimed first half 2016 revenue reached around US$425 million.

The largest part of the claimed revenue was attributed to Shangdong Macrolink New Resources Technology, a purported customer of 600MW of turnkey a-Silicon thin-film module equipment valued at US$462 million and a combined sales and service deal to operate the facility that totalled US$660 million.

Revenue from Shangdong Macrolink in the first half of the year was claimed to be around US$274 million. In 2015, Hanergy TF had claimed revenue from Shangdong Macrolink of around US$248.8 million on the basis it had provided 300MW of production line equipment to the customer in 2015 but had only received around US$20 million that was attributed as an initial down payment. Hanergy TF said in its 2015 annual report that Shandong Macrolink had not made any further payments to the company since.

However, in its current half year report, Hanergy TF reported Shandong Macrolink trade receivables, which is the amount billed by a business to a customers when it delivering goods or services included around US$78 million outstanding from Shandong Macrolink that was more than a year old. Around US$43 million outstanding from up to one year and around US$78 million yet to be paid in the last three months. A total of around US$199 million would seem to be past due at the end of June, 2016.

However, a total of around US$111.6 million was attributed to Shandong Macrolink that was neither past due nor treated as impaired. Hanergy TF did not mention in its latest financial filing whether it had supplied further equipment to Shandong Macrolink. Therefore, it should be expected that the non-past due amount would at sometime transfer to past due status, bringing payments past due to around US$310 million. 

The theme continues in respect to ‘Hanergy Affiliates’, which were attributed with providing around US$57.7 million in revenue in the first half of 2016, compared to around US$7.7 million in the prior year period.

Trade receivables from Hanergy Affiliates outstanding stood at around US$340.2 million at the end of June, 2016, up from around US$334.7 million in the prior year period. 

During the first half of the year 2016, Hanergy TF did not sign any new purchase contracts with Hanergy Affiliates. The company said in financial filings that a total of 48MW of PV modules had been delivered to Hanergy Affiliates in the first half of the year.

Trade receivables from other third parties stood at US$50.2 million at the end of June, 2016.

On a geographical basis, Hanergy TF claimed to generate the vast majority of revenue from China, which was said to have accounted for around US$419.6 million of the total revenue in the first half of 2016. 

Shandong Macrolink and Hanergy Affiliates accounted for around US$331.7 million, indicating independent third party revenue in China amounted to around US$87.9 million. 

Sales outside mainland China remain elusive, despite having several thin-film module manufacturing subsidiaries located in Europe (Solibro) and the US (Global Solar Energy (GSE) and MiaSolé).

Sales in Europe were reported to have been around US$2.8 million, while sales in the US were around US$2.5 million. Sales in other countries or regions were basically negligible. 

Although Hanergy TF does not report module shipments, revenue from module sales and PV power plant projects basically includes Hanergy Affiliates and independent third parties, which totalled around US$150 million in the first half of 2016. 

Hanergy TF had around US$40.6 million attributed to PV projects to be sold under inventory at the end of the first half of 2016. 

The company noted in financial filings that its turnaround in profitability was also attributed to PV construction contracts and the sale of solar power plants and the sale of residential rooftop system.  

However, Hanergy TF did not issue any financial filings separately through the first half of the year that related to any construction contracts or building of PV power plants that stood on its balance sheet at the end of reporting period.

However, parent company, Hanergy Group issued a number of press releases throughout the period, highlighting small downstream ‘demonstration’ projects in and outside China, though these combined account for single digit megawatts. 

The company also had inventories that included raw materials through to finished modules valued at around US$203 million. Cash and cash equivalents at the end of the reporting period stood at around US$117.8 million.

Mystery still surrounds Hanergy TF’s largest current customer, Shandong Macrolink which was purported to be a new business unit of Macrolink Group. However, Macrolink Group has never cited the unit amongst its holdings. It also remains a mystery as to the location of Shandong Macrolink’s a-Si thin-film plant or any reference to any BIPV or other projects its modules may have been deployed. 

Discounting Hanergy TF’s equipment sales and service charges to Shandong Macrolink, its only turnkey contract not technically cancelled, remains a better metric on the company’s actual business operations. 

(Hanergy TF) has claimed to have bounced back from a non-cash loss of around US$1.58 billion in 2015 to a first half 2016 net profit of around US$105.8 million.

Hanergy TF claimed first half 2016 revenue reached around US$425 million.

The largest part of the claimed revenue was attributed to Shangdong Macrolink New Resources Technology, a purported customer of 600MW of turnkey a-Silicon thin-film module equipment valued at US$462 million and a combined sales and service deal to operate the facility that totalled US$660 million.

Revenue from Shangdong Macrolink in the first half of the year was claimed to be around US$274 million. In 2015, Hanergy TF had claimed revenue from Shangdong Macrolink of around US$248.8 million on the basis it had provided 300MW of production line equipment to the customer in 2015 but had only received around US$20 million that was attributed as an initial down payment. Hanergy TF said in its 2015 annual report that Shandong Macrolink had not made any further payments to the company since.

However, in its current half year report, Hanergy TF reported Shandong Macrolink trade receivables, which is the amount billed by a business to a customers when it delivering goods or services included around US$78 million outstanding from Shandong Macrolink that was more than a year old. Around US$43 million outstanding from up to one year and around US$78 million yet to be paid in the last three months. A total of around US$199 million would seem to be past due at the end of June, 2016.

However, a total of around US$111.6 million was attributed to Shandong Macrolink that was neither past due nor treated as impaired. Hanergy TF did not mention in its latest financial filing whether it had supplied further equipment to Shandong Macrolink. Therefore, it should be expected that the non-past due amount would at sometime transfer to past due status, bringing payments past due to around US$310 million. 

The theme continues in respect to ‘Hanergy Affiliates’, which were attributed with providing around US$57.7 million in revenue in the first half of 2016, compared to around US$7.7 million in the prior year period.

Trade receivables from Hanergy Affiliates outstanding stood at around US$340.2 million at the end of June, 2016, up from around US$334.7 million in the prior year period. 

During the first half of the year 2016, Hanergy TF did not sign any new purchase contracts with Hanergy Affiliates. The company said in financial filings that a total of 48MW of PV modules had been delivered to Hanergy Affiliates in the first half of the year.

Trade receivables from other third parties stood at US$50.2 million at the end of June, 2016.

On a geographical basis, Hanergy TF claimed to generate the vast majority of revenue from China, which was said to have accounted for around US$419.6 million of the total revenue in the first half of 2016. 

Shandong Macrolink and Hanergy Affiliates accounted for around US$331.7 million, indicating independent third party revenue in China amounted to around US$87.9 million. 

Sales outside mainland China remain elusive, despite having several thin-film module manufacturing subsidiaries located in Europe (Solibro) and the US (Global Solar Energy (GSE) and MiaSolé).

Sales in Europe were reported to have been around US$2.8 million, while sales in the US were around US$2.5 million. Sales in other countries or regions were basically negligible. 

Although Hanergy TF does not report module shipments, revenue from module sales and PV power plant projects basically includes Hanergy Affiliates and independent third parties, which totalled around US$150 million in the first half of 2016. 

Hanergy TF had around US$40.6 million attributed to PV projects to be sold under inventory at the end of the first half of 2016. 

The company noted in financial filings that its turnaround in profitability was also attributed to PV construction contracts and the sale of solar power plants and the sale of residential rooftop system.  

However, Hanergy TF did not issue any financial filings separately through the first half of the year that related to any construction contracts or building of PV power plants that stood on its balance sheet at the end of reporting period.

However, parent company, Hanergy Group issued a number of press releases throughout the period, highlighting small downstream ‘demonstration’ projects in and outside China, though these combined account for single digit megawatts. 

The company also had inventories that included raw materials through to finished modules valued at around US$203 million. Cash and cash equivalents at the end of the reporting period stood at around US$117.8 million.

Mystery still surrounds Hanergy TF’s largest current customer, Shandong Macrolink which was purported to be a new business unit of Macrolink Group. However, Macrolink Group has never cited the unit amongst its holdings. It also remains a mystery as to the location of Shandong Macrolink’s a-Si thin-film plant or any reference to any BIPV or other projects its modules may have been deployed. 

Discounting Hanergy TF’s equipment sales and service charges to Shandong Macrolink, its only turnkey contract not technically cancelled, remains a better metric on the company’s actual business operations. 

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