(Yicai) March 1 -- Shares of Hi-Tech Moulds & Plastics Technology slumped after the supplier of Human Horizons said its net profit could dive by 60 percent last year, partly due to a production halt of the maker of HiPhi-branded premium electric vehicles.

Hi-Tech Moulds & Plastics [SHE: 301022] closed 4.6 percent lower at CNY21.84 (USD3). 

Net profit could fall by 54 to 60 percent to a point between CNY20 million and CNY25 million (USD2.8 million and USD3.5 million) last year from the year before, the Qingdao-based producer of molds used to make car parts announced yesterday. Listed Chinese firms tend to release their earnings reports for the previous year by April.

One of the reasons behind the slump is that Human Horizons told the supplier on Feb. 26 that it would suspend payments so Hi-Tech Moulds & Plastics had to record a CNY11.8 million loss on accounts receivables.

The Shanghai-based EV startup suspended production on Feb. 18 for at least six months due to a broken capital chain. Zhu Huarong, chairman of state-backed Changan Automobile, told Yicai that the Chongqing-based auto giant is in talks with the maker of HiPhi X about an acquisition but the firms are not yet close to a deal.

Another factor that also contributed to Hi-Tech Moulds & Plastics’s declining performance is an interest expense increase of about CNY15.3 million due to the firm's issuance of CNY397 million (USD55.2 million) of convertible bonds last year, according to the alert. Moreover, a new factory that came on stream last year was not yet generating enough income to cover its operating expenses.

Editor: Emmi Laine