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6 posts from December 2008

China's Solar Energy Market and Thin Film Industry

Solar cell is in general made of silicon and non-silicon materials. Globally, solar cell is dominated by monocrystalline/polycrystalline silicon material with over 90% market share, while the rest goes to thin film materials such as amorphous silicon and CdTe and CIGS. In the coming 10 years, silicon solar cell’s market share is expected to drop to between 70-80%, while thin film solar cell market share will thus increase. In China, there are over 50 manufacturers of silicon solar cell. The total output was 1188MW by the end of 2007, 29% of the global output. On the other hand, the thin film industry in China is still in its cradle and of smaller scale. The key players are Shenzhen Topray, Tianjin Jinneng, Shenzhen Trony, Jiangxi Ganneng, Shenzhen Sumoncle, Harbin-Chronar, the largest capacity being 5MW. Attracted by the market potential, overseas companies have been entering China’s thin film industry. Recently, US-based Argus invested up to $60 million for a 30MW thin film production line in China. Hong Kong-based Xinao Group has plans to invest $200 million to build a 500 MW production line. In addition, Sharp, Q-Cells and DuPont have made investments as well. One of the largest Chinese silicon solar cell... Read more →

Will China Become Acquisitive?

Some people may still remember well how Japanese acquired US companies in 80's and 90's. In the 21st century, China may follow the steps of Japan. China has not only the appetite but also a deep pocket. By September 2008, China's foreign exchange reserves surfed $1.9 trillion. Here is one of a recent transactions that not many people are aware of. Kellwood Company (NYSE:KWD) announced on November 6, 2007 [before its being acquired by SunCapital that its Board of Directors unanimously approved the sale of its Smart Shirts manufacturing operations as well as related real estate assets in two separate transactions that brought Kellwood gross proceeds of approximately $161 million in cash in the aggregate. The Company expected to utilize the proceeds from the transactions to repurchase shares and reduce debt. The repurchase of shares would be in addition to the previously approved $50 million stock repurchase program announced in September 2007. The Company announced that Youngor Group Co., Ltd. (Youngor Group) agreed to acquire Kellwood’s Smart Shirts business for approximately $120 million in cash. Separately, the Company sold its Smart Shirts real estate assets in Hong Kong to Bright Treasure Development Ltd. for approximately $41 million in cash. Kellwood... Read more →

China Getting Into Recession?

These days the question I got most is, "Is China's growth slowing down? How bad is the situation there?" Things are getting ugly, but will be fine. The global slow-down is having a direct impact on China's export, which accounts for approximately 35% of its GDP. A few regions that would be affected most are Guangdong, Zhejiang and Jiangsu provinces, which have the most processing and manufacturing orders from overseas companies of toys, apparels and shoes. Many factories are being shut down or have been shut down and workers, most of them originally from rural areas, lose their jobs and have to either go home or to look for new jobs. Another impact of the global slow-down will lead to the decrease of the amount of foreign direct investment in new manufacturing facilities and the demand for new workers will drop. Reduced foreign direct investment and contraction of domestic demand may lead to the bust of real estate bubble, causing people to lose money in real estate market, on top of the loss from the stock market, which dropped from over 6000 to around 2000 in Dec. If GDP does not grow at double digits, the Chinese government worries that... Read more →

Goldman, Morgan Stanley and Bain to Buy into a Chinese Movie Distributor

Investment funds of Wall Street banks Goldman Sachs and Morgan Stanley and private equity firm Bain Capital planto invest a combined at least $30 million in a Chinese movie distributor Poly Bona soon. This will be the last round before Poly Bona goes public in the US. In 2007, Sequoia and SIG each invested $5 million in Poly Bona. Yu Dong, chairman and president of Poly Bona, headquartered in Beijing, confirmed Goldman's investment when contacted by Reuters by telephone, and added Morgan Stanley and Bain Capital would join Goldman's planned purchase of part of the company. "A little bit more time is needed to settle the valuation issue, but the deal is expected to be done by the end of this month," Yu said. "After all, it is a capital-raising in the financial crisis," he added. When Goldman and Morgan Stanley completed their investments in Poly Bona, the two Wall Street banks would "naturally" become financial advisers for IPO-ready Poly Bona, one of the two sources said. Poly Bona aims to go public in the United States next year but its IPO plan would mostly depend on the market environment, said the sources. Yu declined to comment on a time... Read more →

Intel Invests in Clean Energy and Health Care in China

To our surprise, Intel Capital, the VC arm of Intel is moving into clean energy and health-care for the first time. Intel Capital, different from other VCs, is more to buy out some start-ups to block the technology from being acquired by its competitors, or to support the growth of some technologies that will help boost the demand for Intel's own products. However, in late October, Intel announced it would invest $20 million in Shenzhen-based Trony Solar Holdings Co., a maker of thin-film solar-power equipment. Intel also signed agreement to invest in NP Holdings Ltd., a maker of storage systems for renewable energy. The third investment goes to Viewhigh Technologies Ltd., a maker of health-care related software. Intel has two funds set up to invest in Chinese start-ups. The first fund of $200 million set up in June 2005 has been fully invested. The second fund of a total $500 million was set up in April 2008. Read more →