Huang Ming, chairman of Himin Solar Co Ltd, demonstrates the company's products in Beijing on March 31, 2012. An IPO application by Himin Solar, a company based in Shandong province, was rejected by the China Securities Regulatory Commission. [Photo / China Daily]

The China Securities Regulatory Commission has denied requests from nine solar companies who wished to go public by the end of June because of apparent concern about the worsening business environment for the industry.

The denial has further clouded the outlook of the industry that is already taking a hit from a sluggish global market.

An IPO application by Himin Solar, a company based in Shandong province, was rejected by the CSRC, according to the authority's website. Himin Solar, which focuses on solar thermal industry and solar power generation, is the ninth solar company whose IPO application failed to win approval.

The CSRC does not offer specific reasons for denying the company's request. But in a notice on its website about the rejection of a merger application from Far East Industrial Stock Co Ltd, CSRC notes: "The market environment for new-energy industries including the solar industry has changed dramatically, and the economic prospects does not look good."

But the CSRC's prognosis was refuted by industry sources who have remained confident despite recent setbacks.

"We do not comment on domestic IPOs. But we remain optimistic about the solar industry. That's for sure," said Zhang Jianmin, senior manager of the CEO's office of Suntech Power Holdings Co Ltd, the world's biggest solar panel manufacturer and a New York Stock Exchange-listed company.

Suntech was suffering from poor performance over the past three months, but received a boost recently after a Citibank analyst saw a bottom for the industry in mid-June.

The Associated Press reported Citibank analyst Timothy Arcuri claiming that global demand for solar panels was increasing. And while renewable energy demand may have reached a low point, it is set to grow as prices are approaching the levels of power from traditional sources.

Himin Solar was unavailable for comment on Monday. Earlier media reports by Shanghai Securities News said Himin Solar had planned to go public overseas, but gave up the plan in 2007 and returned to the domestic stock market.

A supply glut and falling prices are cutting the profits of China's solar companies. For most companies the profit margin has narrowed to 20 percent or lower, down from the 139 percent they previously enjoyed, said Wang Quan'an, secretary-general of Shanghai Solar Energy Society.

Chinese companies have been manufacturing PV products for only about 10 years, but now make 60 percent of the products used globally. As China has not formally included solar power-generated electricity into the nation's electricity network, 94 percent of the sales are going to foreign markets, said a report released by China Venture Investment Consulting.

But in the past two years, a sluggish market is exerting pressure on nearly all solar companies. The demand for solar products is falling as European countries, most notably Germany, slash subsidies for the industry.

The US government is imposing new tariffs as it looks to develop its domestic PV industry. While Japan and India are emerging markets with strong demand, they offer limited access to Chinese companies because their governments are highly protective of their own brands.

xieyu@chinadaily.com.cn