22 replies to this topic

[sunnysky]

Registered capital is 50 billion RMB. An investment fund will be created with 100 billion RMB each for each of the three industries with the most over capacities in China.

 

http://solar.ofweek....0-28799406.html

 

If successful, we might start to see some serious M&A in PV in the time ahead.

 

 

[sunnysky]

As its first move, CMI has teamed up with GCL to invest 10 billion RMB on the consolidation of the Chinese solar industry. The chairman of GCL sees China will reach grid parity in 2017.

 

http://solar.ofweek....0-28828211.html

[thejaq]

you are a goldmine. thanks sunny!

[eysteinh]

Thank you sunnysky. You are indeed a goldmine of news and insightful comments. I am happy you are here on this board and you keep inspiring me to find good news as well

[eysteinh]

So speculating - GCL would prefer to keep specializing in wafer/poly. So probably looking at distressed assets. tier 2 guys? LDK?  Major merger like YGE? (would truly make them the godzilla of chinese solar.) 

[sunnysky]

GCL will look into both manufacturing and downstream projects. They already have a separate solar farm business but they will establish a new platform for downstream projects financing. I think some other dominant solar companies (I hope a few US listed) will join the effort with CMI.

[eysteinh]

Yeah that is true it fits with the "new energy" profile of the company and downstream focus. 

[explo]

So speculating - GCL would prefer to keep specializing in wafer/poly. So probably looking at distressed assets. tier 2 guys? LDK?  Major merger like YGE? (would truly make them the godzilla of chinese solar.) 

 

GCL is focusing on whole value-chain perspective but address the cell and module segment with "virtual" integration through tight partnerships with tier1 manufacturers in those segments. Over time I think this could prove to be a great model.

[eysteinh]

Yes I know this. factories close to the production of cell / modules. But as sunnysky points out they are also now heavy in downstream. I agree over time it can be a good model once they dominate. 

[odyd]

Sunny I want to express gratitude for your relentless pursuit of information and enhancing this board's value, with unbiased, cool approach. Glad to have you on board.

In your view, this organization will purchase assets in distress, take a loss on it and resell to other companies, consolidators at prices below market value. Will they buy well operated assets as well? 

[Makan]

Like this maybe the cell plans together with CSIQ make more sense, in fact they would have the missing parts of the value chain and could give some more international exposure, then they would be quite the chinese giant in this industry.

[explo]

Yes I know this. factories close to the production of cell / modules. But as sunnysky points out they are also now heavy in downstream. I agree over time it can be a good model once they dominate. 

 

Yes that's what I said they are directly focusing on the whole chain except cell and module where they use partners. They are and have been for a while very big in the downstream.

[odyd]

 I think GCL has signed everyone who matters for their wafers. Joining others in other areas is a form of ownership for GCL and financing source for others. It is a form of consolidating interests for sure.

I am hoping for this organisation to purchase stressed assets, clean them of liability by repackaging them for the most value (efficiency, location, relationship) and selling them to closed-circle of consolidators. Something like during the banking crisis in the US, feds had done.

Well operated, profitable businesses will be given fair value and opportunity to merge interests, joint ventures etc.

I think this would be the best for the industry.

[eysteinh]

Well as one who followed gcl for 4 years yes they have been in downstream. But only recently have they named the company to focus on this direction.

[sunnysky]

Sunny I want to express gratitude for your relentless pursuit of information and enhancing this board's value, with unbiased, cool approach. Glad to have you on board.

In your view, this organization will purchase assets in distress, take a loss on it and resell to other companies, consolidators at prices below market value. Will they buy well operated assets as well? 

 

Odyd, thanks first go to you for the creation of this site which made everything possible. Many members have made contributions to make it successful and I'm just happy to be part of this effort which is meaningful in many ways beyond just personal investment.

 

While it's still too early to see what will unfold in the future, I can think of the following:

 

(1) GCL will pursue consolidation of poly manufacturing by acquiring distressed assets when it makes sense for them;

(2) Work with leading cell/module producers to streamline the value chain and drive standardization of manufacturing processes and

      PV products quality. This should help CN listed to grow either organically or through M&A since lower tier producers further lose

      ability to compete.

(3) Help to establish a mature project sales market by purchasing projects from the likes of TSL and JASO.

(4) Establish a new platform for banks, funds, and institutions to finance the downstream projects, as previously mentioned.

[odyd]

Thank you Sunny great summary. Who else can become a consolidator within this group?

[sunnysky]

An English article on this. 

 

China's New Private Equity Investment Giant Eyes Solar

http://www.renewable...ant-eyes-solar?

[Xeloris]

How will current companies fare in this situation im guessing,  Will the leaders still be the leaders, will something like this investment group come out of the blue and be the new leader?  Shunfeng basically came from out of the blue last year now planning 3GW installs per year.. i know the article mentions the possibility after consolidation someone like YGE or CSIQ could aquire.. I don't see how YGE could with the amount of debt but then again what is debt in china?

[odyd]

I think this is a guess, similar to mine I made here. To me looks like a federal reserve taking over banks and selling them over to consolidator-qualified company after stripping of liabilities. Would that become a producing or competitive entity, I doubt it.

[Scsnospam]

Shunfeng is showing how easy it is to come in and become a big player, at this time, when ex-giants like STP and LDK are easy pickings. That 3GW pipeline/year could have gone to our C7, so its a net negative.

 

From government's perspective, as long as someone is consolidating the pieces, its good. Whats not good is that if the assets are less efficient, then its equivalent to propping up stp/ldk by another name. So the zombies still live causing problems for the healthy companies.