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The Solar IPO Wave Continues to Grow
By Peter Lynch
Exclusively for InvestorIdeas.com
May 31, 2007
As I have said a number of times in past columns, the solar industry is just at the very beginning of its growth stage. In the past, a solar IPO was a rare event, with never more than 3 or 4 coming in any given year. Last year, 2006, marked the beginning of significant growth in solar and other clean technology related IPO’s.
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More importantly, it was the beginning of serious financial resources coming into the solar industry, which will allow the industry to continue its recent robust growth far into the future. As a result, the days of the solar industry being an under funded “cottage industry” are over and a renewable, clean energy future awaits us all.
A number of new “clean tech” IPO’s have recently come to the market and several more are pending. What is very encouraging is to see that many of the companies are profitable and the others, with the exception of OPTT are very close to turning a profit.
The other point to note is that the solar IPO financing mechanism is now starting to spread out to other areas of “clean tech” i.e. Ocean technology, “Smart Grid” companies, rather than being totally centered in just the solar photovoltaic area. This is a sign of a growing and robust industry and one that, in my opinion, has an exceptionally bright future.
Below is a listing of the latest solar related companies to join the public company ranks.
Completed IPO’s
China Sunergy Co.,LTD. – symbol CSUN
IPO pricing: 8,500,000 American Depositary Shares (ADS) each ADS representing 6 ordinary common shares at $11.00 per ADS. (see ADS note below).
Pre-IPO projected pricing range: $8.00 to $10.00 per ADS
Total Shares outstanding: 237,332,777
Market Capitalization at IPO: $435MM
2006 Numbers: Revenues: $149MM, Net Income $11.8MM
CSUN is a manufacturer of silicon PV panels and equipment. Current capacity is stated at 192 Megawatts (MW), with expansion planned to 390MW by mid 2008.
** ADS Note: An American Depositary Share ("ADS") is a U.S. dollar denominated form of equity ownership in a non-U.S. company. It represents the foreign shares of the company held on deposit by a custodian bank in the company¹s home country and carries the corporate and economic rights of the foreign shares, subject to the terms specified on the ADR certificate. An American Depositary Receipt ("ADR") is a physical certificate evidencing ownership in one or several ADSs. The terms ADR and ADS are often used interchangeably.
Comverge, Inc. – symbol COMV
IPO pricing: 5,300,000 shares at $18.00
Pre-IPO projected pricing range: $15.00 to $17.00
Total shares outstanding: 18,000,000
Market Capitalization at IPO: $324MM
2006 Numbers: Revenues: $33.9MM, Net Income: ($7.89MM)
COMV is one of the first “smart grid” category of clean tech companies. They provide energy solutions that enhance electrical grid reliability and enable utilities to increase available electric capacity during periods of peak energy demand.
EnerNOC, Inc. – symbol ENOC
IPO Pricing: 3,750,000 shares at $26.00
Pre-IPO projected pricing range: $23.00 to $25.00
Total shares outstanding: 18,000,000
Market Capitalization at IPO: $468MM
2006 Numbers: Revenues: $30.96MM, Net Income: ($7.56MM)
ENOC is another of the companies in the “smart grid” category of clean tech companies. The company develops and provides demand response and energy management solutions to commercial, institutional, and industrial customers, as well as electric power grid operators and utilities in the United States.
OCEAN POWER TECHNOLOGIES INC – symbol OPTT
IPO Pricing: 5,000,000 shares at $20.00
Pre-IPO projected pricing range: $20.00 to $22.00
Total shares outstanding: 10,177,219
Market Capitalization at IPO: $200MM
2006 Numbers: Revenues: $1.75MM, Net Income: ($7.1MM)
OPTT is developing for commercialization proprietary systems that generate electricity by harnessing the renewable energy of ocean waves. Their “PowerBuoy” system utilizes the rising and falling of the waves to create mechanical energy that converts into electricity. The company’s “PowerBuoys” would be grouped in arrays off shore and the power would be transmitted, via underwater cable to shore.
Pending IPO’s
GT Solar International, Inc – proposed symbol SOLR
IPO Pricing: Unknown at this time.
Estimated Size of IPO: $200MM
2006 Numbers (9 months ending 12/06): Revenues: $61MM, Net Income: ($3.2MM)
SOLR is one of the world's largest providers of manufacturing equipment and "turnkey" manufacturing solutions to the photovoltaic, or PV, industry. Their products and solutions are used across the PV manufacturing value chain: production of solar grade polysilicon, manufacturing of multicrystalline silicon wafers, production of solar cells and assembly of complete modules.
Further information on GT Solar can be obtained at:
http://www.sec.gov/Archives/edgar/data/1394954/000104746907003224/a2177324zs-1.htm#toc_ja1065_1
LDK Solar Co., Ltd. – proposed symbol LDK
Estimated IPO Pricing: 17,400,000 American Depositary Shares (ADS) each ADS representing one ordinary common share at an estimated $26.00 per ADS
Pre-IPO projected pricing range: $25.00 to $27.00
Total shares outstanding: 106,579,700
Market Capitalization at IPO: $2.77 Billion, priced at $26.00, the mid point of projected range.
2006 Numbers: Revenue: $105MM, Net Income: $25.8MM
LDK is the biggest multicrystalline wafer and cell manufacturer in Asia. It has a current capacity of 215MW and projected capacity of 800MW by 2009.
Further information on LDK Solar can be obtained at: http://www.sec.gov/Archives/edgar/data/1385424/000114554907000920/h00889a2fv1za.htm#119
Yingli Green Energy Holding Company Limited – proposed symbol YGE
Estimated IPO Pricing: 29,000,000 American Depositary Shares (ADS) each ADS representing one ordinary common share at an estimated $12.00 per ADS
Pre-IPO projected pricing range: $11.00 to $13.00
Total shares outstanding: 126,923,609
Market Capitalization at IPO: $1.55 Billion, priced at $12.00, the mid point of projected range.
2006 Numbers: Revenues: $114M, Net Income: $24.1MM
YGE is one of the largest vertically integrated photovoltaics manufacturers in China. They design, manufacture and sell PV modules, and design, assemble, sell and install PV systems. YGW currently has annual production capacity of 95 megawatts of polysilicon ingots and wafers, 90 megawatts of PV cells and 100 megawatts of PV modules.
Further information on Yingli Green Energy can be obtained at:
http://www.sec.gov/Archives/edgar/data/1394029/000114554907000895/h00847a1fv1za.htm#122
J. Peter Lynch has worked, for 30 years as a Wall Street analyst, an independent equity analyst and private investor, and a merchant banker in small emerging technology companies. He has been actively involved in following developments in the renewable energy sector since 1977 and is regarded as an expert in this area. He is currently a financial and technology consultant to a number of companies. He can be reached via e-mail at
Solarjpl@aol.com.
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