ReneSola Ltd. is a leading Chinese photovoltaic company. It was founded in 2005 as a manufacturer of solar silicon wafers. What is remarkable about the company is that ReneSola is the first, fully vertically integrated OEM service provider and manufacturer of solar power technological products in China.
Throughout its corporate history, ReneSola has established a highly appealing reputation through its innovative, high quality and reliable products. Nowadays, the company has become one of the world's largest solar wafer manufacturers with a wide range of products. Through its subsidiaries and strategic partnerships, the company has managed to expand its operational capabilities and diversify its valuable customer base. ReneSola ranked 17th in the Deloitte Technology Fast 500 Program in the Asia Pacific region in 2008 (Source: PR Newswire, 2009). Today, the company is listed on the New York Stock Exchange (NYSE, Ticker: SOL) and the Alternative Investment Market of the London Stock Exchange (AIM, Ticker: SOLA).
Origins
ReneSola was founded in June 2005 by the inspired entrepreneur Xianshou Li, with an initial capital of US $1.5 million. The company was initially known as Zhejiang Yuhuan Solar Energy Source Co., however, in April 2006 it changed its name to Renesola, Ltd (Emerging Markets Report, 2010).
In his early age, Xianshou Li got a Bachelor degree in industrial engineering and worked in the government. However, driven by a strong intrinsic intuition, at the age of 30 he foresaw the emerging alternative power opportunities and he decided to create a company operating in the solar power domain.
In the forthcoming months, the company was floated into several Stock Exchange Markets. Most notable are the London Stock Exchange AIM and the New York Stock Exchange Market. In 2009, ReneSola was the third largest solar wafer manufacturer in the world, by leveraging some strategic acquisitions and partnerships (The Emerging Markets Report, 2010).
Products & Technology
ReneSola offers a wide range of products and supporting services in order to offer wholly, integrated solar solutions concerning the entire industry chain (ReneSola Corporation, 2009). Its product range includes virgin polysilicon, monocrystalline and multicrystalline solar wafers, and photovoltaic (PV) cells and modules, as shown in Picture 1.
Picture 1: The product range that ReneSola manufactures and distributes. (ReneSola Corporation, 2009)
In addition, the company offers ingot and wafer processing services to specific customers, as shown in Figure 1.
Figure 1: Wafer Manufacturing Capacity of ReneSola. (ReneSola Corporation, 2009)
The company incorporates solar wafer technology to achieve significant revenues. More explicitly, solar wafers are manufactured by thin sheets of crystalline silicon material with a thickness of 180 micrometers. Generally, solar wafers are the primary components used in the production of solar cells, the devices appropriate for the conversion of sunlight into electrical energy. To carry out its proceedings the company combines expertise and different monocrystalline and multicrystalline wafer production technologies, as indicated in Figure 2.
Figure 2: Technologies incorporated by ReneSola Ltd.
To carry out its operations, ReneSola occupies the following facilities:
Four wafer manufacturing plants in Jiashan.
A proprietary polysilicon production facility in Sichuan province.
Photovoltaic (PV) cell and module facilities, in Yixing, Jiangsu province.
To remain ahead of the competition, ReneSola is focused on its Research & Development activities in order to invent unparallel technology and deliver disruptive solution to its customers. In more detail, ReneSola has managed to improve solar cells' efficiency by 17.6% and to produce gallium dopant solar wafers with thickness smaller than 180 micrometers (ReneSola Corporation, 2009). In conjunction with the low cost in-house operations the company has managed to stimulate awareness about its brand name and attract even more market opportunities.
To achieve production cost efficiency, ReneSola re-uses consumables, proceeds in kerf loss reductions and has increased wafer slicing yields. Most importantly, the silicon consumption rate dropped 6g/watt, while the wafer conversion cost reduced to US $0.35/W. Furthermore, the company expects to lower its full module cost to US $1.00-1.10 per watt by the end of 2010, as indicated in Figure 3 (ReneSola Corporation, 2009).
Figure 3: Total product shipments by annual quarters. (ReneSola Corporation, 2009)
One of ReneSola's important competitive advantages is its 6 already registered and 11 pending patents. The significance of the latter state lies on the fact that the solar power market is an emerging one, with a very promising future.
Customers
Currently, Renesola has established a significant portfolio of long-term relationships with worldwide leading players in the solar power industry. The prominent positions of its customers, in both domestic and international markets, assist the company in penetrating new markets and pursue emerging opportunities.
A complemented list of the company's substantial customers, concerning the solar power cells and modules, is shown below, in Figure 4.
Figure 4: The most significant customers of ReneSola Ltd.
Recently, the company managed to acquire the exclusive rights to develop a US $706 million solar farm based on a 150MW on-grid project (Yvonne, 2009). The project will take place in the Taiyangshan Development Zone, near the city of Wuzhong in the northern China. This is the first full-scale development project which is anticipated to be fulfilled by 2014.
Subsidiaries
Today, ReneSola has three main subsidiaries that perform all the key operations of the company. The subsidiaries were important for ReneSola in order to complete its vertical integration, both upstream and downstream. A brief description of these companies is presented below (see Figure 5):
Sichuan ReneSola
Sichuan ReneSola Material Co. Ltd. Is a wholly owned subsidiary of ReneSola that was founded in August 2007 that offers polysilicon production capabilities.
JC Solar
JC Solar was established in 2005 under the name Wuxi Jiacheng Solar Energy Technology Co. It was fully acquired by Zhejiang Yuhui Solar Energy Source Co. Ltd on May 20, 2009. The latter invested RMB 118 million in cash to acquire the total share capital. The company's main products include PV cells and PV modules.
Zhejiang Yuhui ("Yuhui")
Zhejiang Yuhui Solar Energy Source Co. Ltd. is a wholly owned subsidiary of ReneSola Ltd. It was established in 2005. Yuhui is mainly occupied in wafers manufacturing and is considered to be one of the fastest growing companies in the photovoltaic (PV) industry.
Figure 5: Company structure. (ReneSola Corporation, 2009)
Management
In 2008, according to the company's annual financial report, the company's organizational structure and board of directors is as follows:
Mr. Martin Bloom, Non-Executive Chairman
Mr. Charles Xiaoshu Bai, Chief Financial Officer
Mr. Xianshou Li, Founder & CEO
D. Panjian Li, COO
Mr. Yuncai Wu, Director & Vice President
Mr. Jing Wang, Independent Director
Dr. Mingde Wang, Vice President of Manufacturing
Mr. Wee Seng Tan, Independent Director
Ms. Julia Jiyan Xu, Vice President International Corporate Finance & Corporate Communications
ReneSola has awarded its board of directors a total of US $1.14 million in cash for the previous fiscal year, as part of the company's effort to incentivize its top performers.
As with the case of the majority of entrepreneurial businesses, ReneSola has started small and then expanded through organic growth and numerous acquisitions. However, its management board has remained intact. This is due to the fact that the majority of ReneSola's shares are possessed by the company's Directors. Mr. Xianshou Li owns a total 26.5%, while Mr. Yuncai Wu owns a 13.6% of the company's shares (Appendix 1). These two top executives have a great influence on the company's decisions. This is also emphasized in the company's 2008 financial report, where it states that the power of its directors is a risk indicator and a warning for the remaining shareholders. These two individuals have the right to act on their own interest, and decide upon matters regarding mergers, consolidations, assets and election of directors. Mr. Xianshou Li and Mr. Yuncai Wu have the absolute control over the company's future.
Furthermore, through a thorough examination of ReneSola's top executives backgrounds and past experiences, it has become evident that their previous expertise and qualifications were crucial to the company's trajectory up to date. The company's founder, Mr. Xianshou Li already possessed important experience in the energy solar industry. He had worked for a solar cell production company in the past, which helped him conceptualize his successful business idea and become ReneSola's father. Moreover, the company's chairman has had a significant impact on the company's strategic moves, international presence and world expansion. Mr. Bloom has been an advisor for a venture capital firm, and has great experience with the creation of new companies and the assessment of new opportunities. In addition, Mr. Charles Xiaoshu has helped ReneSola by providing his financial expertise, and has helped the company with its public offering in both the London and the New York stock exchanges. The majority of ReneSola's top executives have had successful careers prior joining the company. Almost all of them possess numerous years of industrial experience and have achieved a high level of education, including academic titles such as Masters, MBAs and PhDs.
ReneSola also occupies a great number of employees. In 2006 the company employed around 1,800 people, while in 2007 this number reached a total of 3,000. Today, 3,258 employees are working for ReneSola. Their task allocation is a follows: 2,415 in manufacturing, 348 in equipment maintenance, 225 in quality assurance, 25 in purchasing, 62 in research and development, 29 in sales and marketing, and 154 in general and administrative.
Although ReneSola's management team seems to be successful, the company has recently (March, 2010) made some organizational changes. In more detail, the company's VP and director, Mr. Yuncai Wu has stepped down from his duties to become one of the company's independent directors, while Dr. Mingde Wang is not further working for ReneSola. As of March 2010, Ms. Julia Jiyan Xu is the company's new CFO, while Mr. Charles Bai is now in the new role of CSO. Finally, the company has reinforced its human capital by adding Mr. Stephen Huang and Mr. Henry Wang as VP of Wafer Sales and VP of finance and communications respectively. The company has not released the reasons for these alterations, but confirms that ReneSola is happy with these changes and believes that in this way, the company possesses a stronger management team. As a result, the company's organizational structure is now as follows:
Mr. Martin Bloom, Non-Executive Chairman)
Ms. Julia Jiyan Xu, CFO
Mr. Xianshou Li, Founder & CEO
D. Panjian Li, COO
Mr. Yuncai Wu, Independent Director
Mr. Wee Seng Tan, Independent Director
Mr. Jing Wang, Independent Director
Mr. Stephen Wang, Sales
Dr. Mingde Wang, Vice President of Manufacturing
ReneSola's Growth Phase
In order to analyze ReneSola's growth this paper utilizes a well know business model, namely Greiner's five-stage model. Greiner's, as indicated in Figure 6, model illustrates growth as a series of changes resulting from crisis occurring in the each phase of the company's development.
Figure 6: ReneSola and the Greiner's Curve.
According to this model, Renesola is in phase 6, called growth crisis. In this stage the company tries to grow through acquisitions, mergers and holdings and in general extra organizational solutions.
Particularly, in May 2009, as part of its growth strategy, Renesola acquired 100% equity interest of JC Solar, a cell and module manufacturer, for a total cash consideration of $20,5 million. This acquisition is believed to bring further cost synergy in monetary savings as well as a new product line.
In addition, ReneSola's next attempt to grow through acquisitions was through, the Chinese based, Dynamic Green Energy in September 2009. Dynamic Green manufactures solar products and provides original equipment manufacturing services for leading solar manufacturers like Evergreen Solar (ESLR) and SunPower Corporation (SPWRA). The incentive behind this attempt was to increase ReneSola's capacity to offer PV OEM services and extend its efforts to become a fully integrated PV manufacturer. Unfortunately the acquisition could not proceed, as the transaction has not been approved by the local government agencies. The CEO of Renesola commented on the failed acquisition, while trying to downplay its importance: "Despite the termination of the acquisition, ReneSola's downstream strategy remains intact and we continue to witness impressive organic growth in our JC Solar cell and module business. We expect to see significant top-line and bottom-line growth from our downstream business in 2010."
In 2010 Renesola employed Mr. Henry Wang as the VP of Finance. Mr. Henry Wang has an extensive experience in accounting, mergers and acquisitions and he would help Renesola to avoid any failure to integrate any acquired business to ReneSola's operations.
Renesola SWOT analysis
Strengths
Renesola is a leading Chinese manufacturer in the solar wafer industry in terms of scale and cost of production. The company uses its large scale in order to produce large volumes of solar wafers at a low cost (leveraging economies of scale). These places the company among the top green-energy manufactures globally. Moreover, ReneSola, through a number of acquisitions has managed to expand its capabilities to a lower level of the industry value chain in order to offer end-to-end vertically integrated manufacturing solutions.
What is more, the company facilitates a strong research and development department. The technology capabilities of ReneSola, the processes and the "know-how", offer an advantage to the company over its competitors.
Furthermore, Renesola though its continuous development and growth has established a number of relationships with several key players in the solar power industry. This global network with customers and suppliers enables the company to expand its sales and operations to the worldwide market.
Weaknesses
Government regulations on companies' policies are a big issue for any company and will inhibit its further growth. A recent example is the rejection of ReneSola's acquisition processes of Dynamic Green Energy Ltd due to the local government's opposition to this deal. Since the company is based in the Chinese market, the strict government regulations are reducing its growth rate and place the company to a disadvantageous position over external competitors.
The company's management was proven to have a wrong strategic planning that caused a high inventory cost. This created high variable costs to Renesola and additional risks. The company is struggling to reduce this large inventory through a new strategic plan. As a result, the company's balance status is still in red and it generates losses of US $51 million for 2009.
Opportunities
The increasing electricity tariffs due to volatile cost of conventional fuels in the USA, Europe and Asia create a high demand for alternative green energy. Renesola is competing with success in this industry which seems to face rapid growth over the next years. Moreover, the regulations of environmental committees and the Kyoto Protocol make the emission controls even tighter and green energy even more necessary. All these environmental regulations create an attractive market for ReneSola to growth.
ReneSola is in an advantageous place due to the company's large scale and its low production cost. The company can leverage these to penetrate and overrun its European competitors who cannot compete against the low-cost Chinese company.
Additionally, a recent ban on scrap polysilicon procurement to China due to environmental regulations is creating a great opportunity for ReneSola to expand its business, since it eliminates the competition from external companies and scales-up its market.
Threats
New technology may ramp the company's market. According to forecasts on the global solar photovoltaic market, a new non-silicon thin-film technology has important growth potentials and in the future may govern the solar market. This is a major threat for Renesola which has been developing and expanding its business based on polysilicon solar wafers (PRLog Free Press Release, 2009 ). Furthermore, new entrance/competitors in the module making business create a new threat for Renesola.
Strengths
Large scale
Low-cost production
Strategic acquisitions and partnerships
End-to-end, vertical integrated solutions.
Strong R&D departments
Relations with customers and suppliers
Weaknesses
Government regulations
Wrong strategic planning that cause high inventory volumes
Opportunities
Increasing electricity tariffs
Volatile cost of conventional fuels
Environmental regulations (Kyoto protocol)
Penetrate European market
Ban on imports on scrap polysilicon to China
Threats
New technology put the market in danger
New competitors
Figure 7: ReneSola's SWOT analysis.
Financial Analysis
Financial Overview:
ReneSola business capitalizes on economies of scale, low cost production capabilities and technology innovations. ReneSola leverages its in-house virgin polysilicon, solar cell and module production capabilities. Thus, providing its customers with high quality and cost competitive products like solar wafers and solar module OEM services.
The company's global network of suppliers and customers include some of the leading manufacturers of solar cells and modules. This allows ReneSola to be less dependent on spesific business entities. Currently ReneSola's shares are traded at both the New York Stock Exchange (NYSE: SOL) and the AIM of the London Stock Exchange (AIM: SOLA).
Financial Management Change
ReneSola's current CFO, Mr. Charles Bai, has been appointed as chief strategy officer. Ms. Julia Xu, who up to now was ReneSola's vice president of International Corporate Finance and Corporate Communications, will succeed Mr. Charles Bai as CFO. Mr. Charles Bai was a corner stone in ReneSola's growth; he had overseen and improved the company's financial management and internal controls while at the same time guided ReneSola through both NYSE and AIM flotation. He successfully led the company through fund raising campaigns.
Funding Rounds:
The founding rounds are briefly as follows (The Emerging Markets Report, 2010):
ReneSola's predecessor, Zhejiang Yuhui Solar Energy Source Co was founded in June 2005 by Mr.Xianshou Li. The company's initial US $1.5 million capitalization was made possible due to earlier success of its founder.
Fourteen months after the inception of ReneSola, the company raised US $50 million on London's AIM.
In March 2007, the company raised an additional US $120 million through a convertible bond issue.
ReneSola made its way to the New York Stock Exchange in January 2008, raising US $129 million.
Current Financial Position
ReneSola's strategy has radically shifted with its movement in the lucrative high margin module business in FY2010 with a relative low priced strategy to gain a significant market share. Their current aim is to displace EU module makers and limit market gains of integrated cell-module makers. ReneSola aims to ship between 150MW to 250MW of modules in FY2010, adding an additional US $50 million to Gross Profit (Gupta & Lu, 2009).
The core wafer business is becoming profitable as the high cost polisilicon inventory is depleted (Gupta & Lu, 2009).
As entry barriers in the polysilicon production have disappeared, ReneSola's internal polysilicon plant is becoming cost competitive as it achieves costs of approximately US $40/kg (Gupta & Lu, 2009).
ReneSola's 3-year deal in Europe indicates that European solar companies cannot compete against the low-cost Chinese ones, especially with Germany getting ready to significantly reduce its solar subsidies (Rosenbaum, 2010).
ReneSola managed to decrease its Cash Cycle from 165.2 in Q1-08 to 86.8 in Q1-09. This was managed by a decrease in both the days sales outstanding (DSO) and the days inventory outstanding (DIO) (Gupta & Lu, 2009).
ReneSola's estimates market cap at NYSE (SOL) stands at US $360.31 million (Shute, 2010).
Due to the low market cap and the high inventory drag, ReneSola's stock in NYSE underperforms and is currently one of the cheapest solar stocks globally.
Appendix 5 shows ReneSola's position.
Future Prospects of the Company
We valuate ReneSola by adopting Morgan and Stanley Triangulated valuation that uses ratios like P/E and P/BV along with intrinsic value to get a more accurate future valuation. Morgan and Stanley believe that a higher share price (US $6.60) should be expected for ReneSola, as seen in Appendix 3 (Gupta & Lu, 2009).
ReneSola's recent failed acquisition of Dynamic Green energy LTD, suggests that the company is aiming to be fully vertically integrated in the Solar Power Industry.
ReneSola has penetrated the expanding US Green Energy market. The US currently provides various incentives for both renewable energy users and manufacturers.
ReneSola's position offers a competitive advantage to exploit the expected growth (6% per year) in the Chinese demand for energy, 60% of its revenues deriving directly from operations China.
As oil prices are constantly fluctuating typically hitting new high records, the average citizen becomes more self aware of the problems that CO2 creates to the environment. Since 2001 there was a strong push for new economic alternatives such as solar energy. From 2001 to 2008, the solar industry has grown on an average of 41% per year and is projected to continue at the same rate in the future (Gupta & Lu, 2009).
Financial Operation Risks
ReneSola needs to develop a new module distribution channel to market successfully its own brand module. Such a strategy would need a good marketing network which currently is unproven.
ReneSola has a high financial leverage and our estimated net D/E ratio is approximately 60%. This means that ReneSola needs to be careful when allocating capital, as it has a negative FCF (Appendix 4) from its high growth strategy and the company would need additional debt to continue its growth. There is a relatively small risk that there may be a further equity dilution through this strategy.
Country Specific Risks
China's regulations and policies have already hindered ReneSola's growth as it had stopped the acquisition of Dynamic Green Energy Ltd.
Any economic slowdown could lead to reduced revenues, as the Chinese market contributes almost 60% to the company's revenues.
ReneSola's Milestones (ReneSola Corporation, 2009)
In June 2005, our predecessor Zhejiang Yuhui Solar Energy Source Co., Ltd., which primarily manufactured monocrystalline wafers, was founded with a registered capital of US $1.5 million.
By April 2006, the company had installed 36 monocrystalline furnaces and reached annualized wafer production capacity of 30MW.
In May 2006, ReneSola received ISO9000 certification.
In August 2006, ReneSola listed on AIM of London Stock Exchange (LSE: SOLA), successfully raising US $50 million.
In December 2006, our products passed appraisal and the organization became recognized as a Major Science and Technology Project of Zhejiang Province.
By the end of 2006, ReneSola had installed 90 monocrystalline furnaces and reached annualized wafer production capacity of 80MW.
In March 2007, ReneSola successfully issued a US $120 million convertible bond in Hong Kong via Deutsche Bank to fund the continued expansion of its production facilities and product lines.
By May 2007, the company had installed 186 monocrystalline furnaces and reached annualized wafer production capacity of 165MW.
In August 2007, the company commissioned a 160MW multicrystalline plant and the annualized wafer production capacity reached 378MW.
In September 2007, the company established Sichuan ReneSola Silicon Materials Co., Ltd., a 3,000 tonnes/year polysilicon plant to be commissioned in first half of 2009.
In January 2008, ReneSola successfully raised over US $129 million and listed on the main board of the New York Stock Exchange under the ticker symbol "SOL".
In May 2008, Chen Changzhi, vice chairman of the Standing Committee of China's National People's Congress, visited the company's Zhejiang Yuhui subsidiary.
By September 2008, the annualized wafer production capacity reached 595MW.
In October 2008, Zhao Hongzhu, secretary of the Zhejiang Provincial Party Committee, visited Zhejiang Yuhui.
In November 2008, Xi Jinping, vice chairman of China, visited Zhejiang Yuhui.
By December 2008, ReneSola had installed 306 monocrystalline furnaces and 72 multicrystalline furnaces, and we reached annualized wafer production capacity of 645MW.
In May 2009, ReneSola formally entered the cell and module production sector through our purchase of Wuxi Jiacheng Solar Energy Technology Co., Ltd. (JC Solar).
In September 2009, the company signed a share purchase agreement with Dynamic Green Energy Limited (DGE) and its shareholders to acquire 100% of the shares of DGE, increasing our OEM capabilities and providing the company with additional ingot, wafer, metallurgical grade silicon, cell and module manufacturing capabilities Unfortunately, this agreement did not eventually flourished.
Appendices: Tables & Figures
Appendix 1
Directors
Mr. Martin Bloom has been ReneSola's independent director since July 2006 and has served as chairman of the board since September 2006. Mr. Bloom is currently the chairman of the China UK Venture Capital Joint Working Group and special advisor for Asia of Argopolo Capital Partners, an international telecom and media convergence venture capital fund. He has also been a partner of Cambridge Accelerator Partners LLP, a venture fund, since August 2004. From 1996 to 1997, he worked for Coopers & Lybrand as project manager of the International Business and Industrial Secondments (IBIS) Scheme, a technology transfer scheme between the United Kingdom and Japan on behalf of the Department of Trade & Industry of the United Kingdom. Mr. Bloom has a bachelor's degree with honours in economics from the University of Southampton and a master's degree in history jointly from Imperial College and University College, London.
Mr. Xianshou Li has been Renesola's director and chief executive officer since March 2005. Prior to founding the company's solar power business in 2005, Mr. Li founded Yuhuan Solar Energy Source Co., Ltd., a manufacturer of solar cell and module products for both commercial and residential applications and served as the chairman since its inception. Mr. Li also served as the general manager of Yuhuan County Solar Energy Co., Ltd., a manufacturer of mini solar panels and solar cell modules from 2002 to 2006. He worked as a government official in the Yuhuan County Culture Bureau from 1997 to 2000. Mr. Li received his bachelor's degree in industrial engineering management from Zhejiang Industrial University in 1991.
Mr. Yuncai Wu has been the company's director since March 2005 and has served as our vice president since November 2007. In March of 2010 he stepped down to become a Director. Mr. Wu has been a director of Zhejiang Yunhuan Solar Energy Source Co., Ltd. since its inception in 2004. Mr. Wu worked with the Yuhuan County Government from 1999 to 2005, first as a section chief in Industrial and Economic Committee from 1999 to 2001 and then as a section chief in the Bureau of Economic and Trade from 2001 to 2005. Mr. Wu received his bachelor's degree in computer science from Zhejiang University in 1988.
Mr. Jing Wang has been Renesola's independent director since June 2006. Mr. Wang is currently the chief economist at Minsheng Bank. He is also an adviser for the United Nations Development Program. He currently serves as an independent director at Tianjin Binhai Energy & Development Co., Ltd., an energy company listed on the Shenzhen Stock Exchange in China, and Tianjin Marine Shipping Co., Ltd., a shipping company listed on the Shanghai Stock Exchange in China. From 2001 to 2003, he was the general manager of Tianjin Investment Company, a company that invests in the energy sector. From 1999 to 2001, he was a deputy director of Securities and Futures Administrative Office of Tianjin. Mr. Wang received his bachelor's degree in finance from the Tianjin University of Finance & Economics in 1982 and his master's degree in international finance from the University of Paris in 1983.
Mr. Wee Seng Tan has been Renesola's independent director since April 2009. Mr. Tan has over 30 years of experience in financial, business, acquisition and post-acquisition management. Mr. Tan previously served executive roles, including executive director, chief financial officer and other positions, for Li Ning Company Limited from 2003 to 2008. Prior to joining Li Ning Company Limited, Mr. Tan worked at Reuters Limited since 1984 and served as a senior vice president in charge of business management in China and other northeast Asian countries from 1999 to 2002, as a finance manager in charge of East Asia region financial management in 1998, as managing director of AFE Computer Services Limited, a Reuters Hong Kong subsidiary, from 1995 to 1998 and as director of Infocast Pty Limited, a Reuters Australia subsidiary, from 1994 to 1995. Mr. Tan is a fellow member of the Chartered Institute of Management Accountants in the United Kingdom and a fellow member of the Hong Kong Institute of Directors.
Executive Officers
Ms. Julia Jiyan Xu has been Renesola's vice president of international corporate finance and corporate communications since March 2009. In March 2010 she became ReneSola's Chief Financial Executive. She has over 10 years of international experience in the financial industry. Prior to joining Renesola, she worked at Deutsche Bank as a member of the Debt Capital Market's coverage team and before that as an equity research analyst until mid-2007 after receiving her MBA in 2004. From 1997 to 2002, she worked in various divisions at Bankers Trust and Lehman Brothers in New York, Tokyo and Hong Kong. Ms. Xu obtained her bachelor's degree in Biology from Cornell University in 1995 and received her MBA from Johnson School of Management of Cornell University in 2004.
Mr. Henry Wang is Renesola's new VP finance and communications officer as of March 2010. Mr Wang has over 15 years of experience in financial services with extensive experience in accounting and mergers and acquisitions. Before joining ReneSola, Mr. Wang served as vice president of finance for Jiayu Logistic Group and financial controller for Expeditors International Incorporation. Mr. Wang holds CPA and CIA certifications and received his bachelor's degree from Wuhan University and MBA from Hong Kong Opening University.
Mr. Stephen Huang has joined ReneSola on March 2010 as the company's new Wafer Sales Director. Mr. Huang is a former reserve officer for the Taiwan Marine Corps, has over 18 years of managerial and sales experience, including 15 years in the solar industry. Prior to joining ReneSola, Mr. Huang served as project director for Taipei County Solar City. Mr. Huang received his bachelor's degree in Agricultural Economics from Taiwan University.
Appendix 2
Key Ratios and Statistics
Reuters: SOL.N Bloomberg: SOL US
China Clean Energy
Price Target
US$6.60
Upside to price target (%)
47
Shr price, close (Dec 15, 2009)
US$4.50
52-Weeks Range
US$7.88 - 2.02
Sh out, dll, curr (mn)
85
Mkt cap, curr (mn)
US$382
EV, curr (mn)
US$703
Avg daily trading value (mn)
US$2
Appendix 3
Fiscal Year ending
12/08
Key Ratios
2008
ModelWare EPS (US$)
(0.67)
Prior ModelWare EPS (US$)
(0.67)
Per Share (US$)
(0.67)
Consensus EPS (US$)
(0.30)
EPS
0
Revenue, net (US$ mn)
670
DPS
5.52
EBITDA (US$ mn)
(25)
BVPS
ModelWare net inc (US$ mn)
(51)
P/E
NM
Return (%)
P/BV
0.9
ROA (%)
-5
RNOA (%)
(11.8)
ROE (%)
-41
ROE (%)
(40.8)
Op. ATO
0.8x
EV/EBITDA
NM
Div yld (%)
0.0
Gearing (x)
FCF yld ratio (%)
(157.7)
Net Debt/Equity
0.6x
Leverage (EOP) (%)
95.9
Current ratio
1.3x
Margin (%)
Gross Margin (%)
-2
Operating Margin (%)
-7
Net Margin
-8
Appendix 4
Balance Sheet
Cash Flow Statement
US $million
2008
US $million
2008
Cash & Equivalent
112
Net Income Current
(51)
Restricted Cash
6
Depreciation and amort.
16
Marketable Security
0
FA Disposal Loss
0
A/R & N/R
81
Net Investment Losses (Gains)
0
Inventories
193
Dec(Inc)-A/R
(1)
Other Current Ass.
49
Dec(Inc)-Inventy
(82)
Total Current Assets
442
Inc(Dec)-A/P
14
Long-term Investment
0
Others
(138)
Total Fixed Assets
341
Cash Flow-Operating
(141)
Prepaid & Advances
175
Other Non-Current Assets
47
(Purchase) of FA
(234)
Total Assets
1.005
Others
14
Cash Flow-Inv.
(358)
Bank loans
192
A/P & N/P
87
Free Cash Flow (FCF)
(499)
Tax payable
0
Curr. of L-T Dept.
0
Issue of shares/changes in capital
297
Other Curr. Liab.
54
Dividend Paid
0
Total Current Liab.
333
Inc(Dec) S-T Debt
120
Convertible Bonds
139
Inc(Dec) L-T Debt
131
Total Other L-T Liab.
149
Oth. Adjust-Finance
0
Total non-current liabilities
288
Others
40
Total liabilities
621
Cash Flow-Financing
589
Paid-up capital
331
Change in Cash
59
Statutory Surplus Reserve
18
Net Cash/(Debt), b/f
53
Foreign currency translation reserve
0
Net Cash/(Debt), c/f
112
Retained earnings
13
Others
22
Total Equity
384
Total liabilities, MI and S/E
1.005
Appendix 5
Income Statement
US $million
2008
Turnover
670
YoY Growth (%)
164
Less: COGS
(684)
Gross Profit
(14)
% margin
-2
Operating Expenses
(31)
Sales and Marketing
(1)
General and Admin
(21)
Operating Profit
(45)
% margin
-7
Foreign Exchange
(3)
Interest Income
2
Interest Expenses
(12)
Others
0
Pre-tax profit
(59)
% margin
-9
Tax
2
Net Income
(51)
Fully diluted EPS (US$)
(0.67)
YoY Growth %)
-183
Appendix 6
ReneSola: Base Valuation
Methology
Value ($)
P/E Based
15.0x
6.1
P/BV Value
1.2x
6.6
Intrinsic Value
RI Based
7.0
Average
6.6
