(Yicai Global) July 22 -- Zhongtian Technologies’ stock price fell by the daily trading limit after the Chinese manufacturer of optical fiber cables said it had run into trouble with contracts for CNY3.5 billion (USD540 million) of high-end communications gear.

Zhongtian Technologies [SHA: 600522] fell 10 percent to close at CNY9.18 (USD1.42) today, paring the Nantong, Jiangsu-based firm’s market value to CNY28.2 billion (USD4.36 billion).

The company had paid CNY2.1 billion in advance to Zhejiang Xinwang Energy Engineering for top-end communications materials at the end of last month, but the supplier neither delivered the goods nor refunded the payment, it said in a statement late yesterday.

There are also difficulties at Zhongtian Tech’s subsidiary Nantong Jiangdong Electric Communications, where overdue accounts receivable from its client Aerospace Shenhe Technology Beijing totaled CNY510 million (USD78.9 million) as of the end of last month. Aerospace Shenhe failed to pay for goods in a CNY1.1 billion order, so Jiangdong Electric stopped deliveries to avoid further risk of non-payment.

Formed in 1996, Zhongtian Tech focuses on optoelectronic transmission, mainly for optical communications, power construction and ocean engineering.

The company started its high-end communications business in 2019, with operating revenue from the business accounting for just 5.47 percent of the total last year, the statement said. The firm’s suppliers and clients in the business are completely different from those in its core operations.

Zhongtian Tech reported operating revenue of CNY11 billion in the first quarter of this year, up 24 percent from a year earlier, and CNY492 million in net profit, up 39 percent. Earnings per share were CNY0.1632 (2.5 US cents), up 39 percent, per its financial report.

Editor: Tom Litting