Chinese Solar Firm GCL Tumbles to Nearly Five-Year Low Despite USD140.7 Million Buyback Plan
Tang Shihua
/SOURCE : yicai
Chinese Solar Firm GCL Tumbles to Nearly Five-Year Low Despite USD140.7 Million Buyback Plan

(Yicai Global) March 26 -- GCL System Integration Technology's shares fell to the lowest in almost five years this morning after the Chinese solar panel maker yesterday warned investors about a coronavirus-caused slump in its first-quarter output. Even a maximum CNY1 billion (USD140.7 million) share buyback plan couldn't prop the price up.

For a third day, GCL System's stock price [SHE: 002506] touched a 10 percent floor limit, sliding to CNY3.6 (50 US cents) this morning, which also happened to be the weakest since August 2015. In the afternoon, the shares logged CNY3.75.

The stock price plunge may be caused by the spread of Covid-19 abroad, Chinese media reported. GCL's overseas business, including the big markets of the US, France, and Spain, made up more than 60 percent of its total, according to its 2019 interim earnings report.

The Suzhou-based company announced two potential share price drivers this morning, both of which failed.

GCL's parent Golden Concord Holdings and a state-owned platform under Jiangsu province's Siyang country, a new investor, will burn a sum between CNY500 million and CNY1 billion to buy into GCL in the next 12 months. Golden Concord already has a 42 percent stake in the target firm.

Moreover, GCL and Beijing's National Battery Technology will form a 55:45 joint venture to offer energy storage services for fifth-generation wireless networks base stations.

Production is gradually returning to normal but the outbreak will have a certain impact on GCL's first-quarter performance, the company said in a statement yesterday. The firm is also planning to invest in plants to make massive solar modules, it added.

Editor: Emmi Laine

Follow Yicai Global on
Keywords: GCL System Integration , Stock Price , Buyback Plan , Solar Power System