Although the company has a long history of listing, the company has not received widespread attention in the market because of its poor operating performance in the past few years. Due to the significant development of the company's business in 2021, we introduce the company in this report.
At present, two main disadvantages have been eliminated: rising production costs and outdated battery production lines.
The annual production capacity of the company's monocrystalline silicon ingots and wafers will be 3.6GW by the end of 2020 and will be expanded to 9.5GW by the end of 2021.
After the adversity of the past few years, the company is expected to recover and usher in a turning point in 2021. The upcoming 2020 results may serve as a catalyst.
An integrated photovoltaic enterprise
Sunshine Energy, founded in 2001, is the largest photovoltaic manufacturer in Northeast China. The company listed on Hong Kong Exchanges and Clearing on March 31, 2008, when it issued 363 million new shares at an IPO price of HK $2.92. Solar Energy is an integrated photovoltaic company specializing in monocrystalline silicon technology. Initially, the company focused on the vertical integration of photovoltaic products, covering a variety of upstream products, such as single crystal silicon ingots, single crystal silicon chips, solar cells and modules. However, because the company's solar cell production is not competitive, the company's focus has shifted to selling its own wafers to a number of large professional solar cell manufacturers and buying solar cells from these companies to produce their own modules. and sell the module to the customer. At present, Solar Energy has established its advantages in the production of single crystal silicon ingots, single crystal silicon wafers and modules. The company's main customers include Sharp, National Dian Investment, Xinyi Glass, CGN Power Co.,Ltd., China Huadian Group, Beijing Holdings, Sanxin Dianwei, AikoSolar, Zhonglai shares and Maodi. Solar energy is expected to benefit from continued investment in solar energy by non-solar companies.
The new production base enhances the competitiveness of the company
The main production base of Sunshine Energy is located in Jinzhou, Liaoning Province, where the production cost (especially electricity) is very high. The annual production capacity of the company's monocrystalline silicon ingots and wafers will be 3.6GW by the end of 2020 and will be expanded to 9.5GW by the end of 2021. The new production base is located in Kuining, Yunnan, where electricity is more than 50% cheaper than in Jinzhou. Considering that the new production base in Yunnan has significantly reduced production costs directly and indirectly, Solar Energy is expected to become more competitive.
Poor performance in the past few years
The latest unaudited operating data show that due to strong demand, the company's outbound shipping volume of production business increased from 4133.7MW in 2019 to 6811.2MW in 2020, an increase of 64.8% over the same period last year, while turnover increased by 37.0% year on year, from 4.4256 billion yuan in 2019 to 6.0752 billion yuan in 2020. However, the tight supply of upstream raw materials, including silicon and photovoltaic glass, is expected to adversely affect the company's performance. Sunshine recorded the impairment of assets caused by the elimination of backward battery capacity in fiscal year 20. Due to a variety of reasons, including litigation, lack of competitiveness of battery manufacturers and tight supply of key components, Sunshine has underperformed over the past few years, and we believe that the company's major disadvantages have been eliminated. and expect the company to get out of the predicament of the past few years.
Introduction of strategic shareholders
Sunshine Energy will issue 180 million new shares at a price of HK $0.29 per share on January 28, 2021, and the net proceeds of HK $52.1 million will be used as general working capital. According to the announcement, the offering subscription has introduced strategic shareholders for the company and expanded its shareholder base. We believe that Sunshine's introduction of strategic shareholders may help the company continue to develop and attract industry participants and investors who are interested in the development of the solar industry. Although the company has a long history of listing, due to the poor operating performance in the past few years, the company has not received widespread market attention. Due to the significant development of the company's business in 2021 and the opportunity to become a turning point for the company, we introduce the company in this report. We expect that more relevant information will be released after the company's communication with investors continues to increase, and the upcoming 2020 results may serve as a catalyst.
