Shares slide after China-based LDK Solar posts unexpected loss


Reuters

China-based solar equipment manufacturer LDK Solar Co. Ltd. posted a larger-than-expected quarterly loss and forecast weak second-quarter sales, sending shares down nearly 9 percent to below US$2 on Tuesday.

Solar analysts believe LDK’s weak cash position and tough environment for solar makers could hurt its ability to tap debt markets, making its future uncertain and possibly dampening investor interest in China’s solar sector, which holds more than 60 percent of the global solar market.

“If LDK goes bankrupt, it will indicate significant bankruptcy risks for other Chinese solar companies and could significantly shake investors’ confidence in Chinese solar companies,” Gordon Johnson, analyst with Axiom Capital Management, said in a note to investors. The company did not respond to a request for comment.