(Yicai) Nov. 13 -- Shares in Hainan Drinda New Energy Technology plunged today after the Chinese supplier of N-type TOPCon photovoltaic cells said that it is abandoning plans to build a solar cell manufacturing base in Oman due to the evolving situation in the Middle East and growing uncertainty over tariff policies.

Drinda’s share price in Shenzhen [SHE: 002865] tumbled 8.8 percent to close at CNY12.23 (USD1.83). Its Hong Kong-traded stock [HKG: 2865] plummeted 10.4 percent to end the day at HKD12.05 (USD1.50).

Drinda is scrapping a plan, first announced in July 2024, to invest around USD280 million in a high-efficiency solar cell manufacturing facility with an annual production capacity of 5 gigawatts in Oman's Sohar Free Zone, the Haikou-based firm said yesterday. The project had been one of the company's key fundraising initiatives when it completed its secondary listing in Hong Kong in May last year.

Drinda cited several adverse factors behind the decision, including slower-than-expected progress, escalating international trade tensions and growing uncertainty over tariff policies in potential target markets.

In particular, the US-Iran conflict that broke out at the end of February this year has raised concerns over the stability of logistics routes, supply chain security and personnel safety in the region where the project is located, Drinda said.

In addition, China's Ministry of Commerce and Ministry of Science and Technology announced plans in October to revise regulations and add certain photovoltaic technologies to the list of technologies subject to export prohibitions or restrictions. This has increased uncertainty over the regulatory and compliance requirements the project might face if it proceeded, Drinda added.

The company said the project had not entered the substantive implementation stage and therefore the decision to withdraw is not expected to have a material adverse impact on the firm’s existing operations.

Drinda raised net proceeds of HKD1.3 billion (USD164 million) from its secondary listing on the Hong Kong Stock Exchange in May last year. According to its listing prospectus, HKD969 million of the proceeds had been earmarked for the Oman solar cell manufacturing project.

The firm said the funds originally allocated to the project would instead be used primarily for research and development of photovoltaic cell products, upgrades to existing production technologies and manufacturing lines, as well as raw material procurement and expansion into new application markets.

When Drinda first announced the Oman investment in 2024, it said the proposed facility would leverage the Sohar Free Zone's geographical advantages and trade policies to serve markets in the Middle East and Europe, while expanding its overseas production capacity and strengthening its international competitiveness.

Editor: Kim Taylor