22nd May 2014 11:27
LONDON (Alliance News) - Gowin New Energy PLC said Thursday it has been hit by debtor recoverability delays in China, as the LED lighting sector has seen significant growth since the beginning of the year.
Shares in the AIM-listed company dropped Thursday after the company said it has faced payment delays from customers in China, including government contractors and a lengthening of debtor days.
Gowin said it is working to improve the pattern by rebalancing towards export orders and is subsequently pursuing a number of new business opportunities in export markets, including Europe, where invoice payments tend to be faster, as a means of utilising working capital more effectively and reliably, it said.
The company notes that despite growth in the LED lighting sector, banking conditions have been constrained in general, with the Chinese government making it harder for banks to lend to SMEs which has had an impact on both competitors and customers, and has led to the increase in debtor days.
However, Gowin said that its order book has been growing across the business and that the board remains confident about its outlook generally.
Shares in Gowin were trading 22.58% lower at 3 pence per share Thursday afternoon, the second biggest faller on AIM.
By Alice Attwood; [email protected]; @AliceAtAlliance
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