(Yicai Global) May 29 -- Trina Solar’s shares slumped after the Chinese photovoltaic giant said its third-largest shareholder plans to further pare its stake.

Trina Solar [SHA:688599] closed down 16.3 percent at CNY40.30 (USD5.70) a share in Shanghai today, having fallen 37 percent so far this year amid market concerns about overcapacity in the solar panels sector.

Xingyin Capital and its wholly owned unit Shanghai Xingjing Investment Management will sell up to 122.9 million Trina Solar shares worthing CNY5 billion (USD708 million) in the next six months, equivalent to 5.65 percent of the firm’s total stock, Changzhou-based Trina Solar said on May 27.

Xingyin Capital and its subsidiary are selling the shares to raise money for their own businesses, the statement said, adding that the two hold stakes of around 10.7 percent and 0.4 percent respectively, which were acquired before Trina Solar’s initial public offering.

The latest move follows recent sales of their holdings in Trina Solar. Between last November and this month, they have sold a combined 2.4 percent stake in the firm for CNY3.2 billion, Trina Solar said in a statement on May 22.

Formed in 1997, Trina Solar is one of China’s leading PV panel suppliers and went public on Shanghai’s Nasdaq-like Star Market in June 2020. Its net profit surged 225 percent to CNY1.8 billion in the first quarter from a year ago on a 40 percent rise in revenue to CNY21.3 billion thanks to rapid development in the PV market, its latest earnings report said.

But there are market concerns about overcapacity in the solar panel industry, which are believed to be a factor in Xingyin Capital’s share sale. Various PV companies have announced an expansion in their capacity this year. Trina Solar’s rival Jinko Solar said last week that it will build an all-in-one PV plant for CNY56 billion.

Editors: Dou Shicong, Tom Litting