Anwell

Anwell: wholly owned subsidiary Dongguan Anwell Digital Machinery (DADM) has secured a Rmb700m capital injection from the Dongguan Municipal Govt for the development of its 2nd thin film solar panel manufacturing base in the city.

In turn, the Dongguan Govt will take a 19.5% stake in DADM, with an option to sell its shares to Anwell at cost plus interest after 5 years. While this translates to a value of Rmb 3.6b (S$680m) for DADM, we must be mindful that construction of the 2nd plant has not even been completed yet. Hence such value cannot be realized yet. Alternatively, one can view the govt’s capital injection as a form of subsidy.

In total Anwell has secured Rmb1.2b in long-term funding for the Dongguan Plant, as well as the expansion of the Anyang plant from the govts of the respective cities. Anwell aims to achieve 1.5 GW of annual pdtn capacity in 5 years.

Co was loss making in the last quarter.

Recall, last wk we mentioned that investors are starting to question profit estimates of China’s soalr markets after Moody’s highlighted accounting risks at 5 Chinese companies, incl LDK the world’s2nd biggest solar panel maker. Moreover the industry is struggling with falling demand and prices following subsidy cuts in Germany and Italy, while the supply glut continues to grow with players still embarking on output increases.