HANERGY Thin Film Power Group has seen a rise in demand for loaned stock from short-sellers over the past six months, data show, indicating some investors doubt its strong share surge can sustain.

    Its shares are now the third-most shorted on the Hong Kong stock exchange, with nearly all of its stock, or about 4 percent of the free float, eligible for stock-lending out on loan, according to financial data firm Markit as of March 6.

    That represents an improvement in demand for shorting from the 75-80 percent of the eligible stock loaned out before October last year. Hanergy shares have gained 414 percent over the past six months.

    Short-sellers bet on a stock’s price decline by selling it using borrowed shares. They later buy the stock at the lower price to return to the borrower and pocket the difference.

    Hanergy is involved in the manufacturing of equipment and production lines used to make thin-filmed solar panels that convert sunlight into electricity.

    The firm has mainly relied on its parent — Hanergy Holdings Group Ltd. — for revenue and profits. Under a long-term arrangement, Hanergy Thin Film sells solar panel-making production equipment to its parent, which in turn supplies solar panels made by the equipment maker to the listed firm.

    That business arrangement has caused some concern among analysts. Some have also questioned Hanergy’s outlook.

    “The [thin-film] technology may have some market potential but I don’t expect it to replace crystalline silicon as the mainstay in the industry any time soon,” said Glenn Gu, a Shanghai-based independent solar energy consultant.

    The firm’s shares have jumped over the past year even as many major U.S.-listed Chinese solar panel makers’ shares have slid.

    The surge has caught the eye of mainland investors and the company has consistently topped the charts for daily trades on the southbound leg of the landmark Shanghai-Hong Kong stock connect program. (SD-Agencies)