Cheng Kin-ming: ‘Emperor’ of China’s solar power industry

November 28, 2013 Leave a comment

Cheng Kin-ming: ‘Emperor’ of China’s solar power industry

Staff Reporter

2013-11-27

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Cheng Kin-ming, a solar energy and real estate investor from Hong Kong, has been dubbed “the emperor of the photovoltaic industry” in China after he became the most significant stockholder of the Hong Kong-listed Chinese solar panel manufacturer Shunfeng Photovoltaic International, the third-largest stockholder of LDK Solar, and a business partner of Hareon Solar Technology in the past year, reports the Chinese-language Beijing News.

In mid-November, Shunfeng purchased the Wuxi-headquartered Suntech Power — one of the world’s largest solar panel producers — for 3 billion yuan (US$492 million). Under the deal, Shunfeng must also spend another 3 billion yuan in the coming two years in an effort to promote Suntech’s technology upgrades and output expansion.

Sources within the photovoltaic sector described the merger as “a snake that tries to swallow an elephant,” as Shunfeng’s output stood below 200 megawatts during the first half of the year — a figure far below that of China’s top 20 photovoltaic manufacturers.

Shunfeng’s operational revenues were also far below those of Suntech’s, the paper said. In 2011, Suntech generated annual revenues of US$3.1 billion, while Shunfeng recorded annual revenues of only 1.9 billion yuan (US$311 million).

Suntech’s revenue dropped by nearly 50% to US$1.6 billion last year, while Shunfeng also recorded a decline with 1.06 billion yuan (US$174 million). Some market sources doubt whether Shunfeng has the funds to clear Suntech’s 3 billion yuan (US$492 million) worth of debts, the paper said.

However, prior to Cheng’s purchase of Shunfeng shares, its value stood at only HK$0.3 (US$0.039) per share. As of Nov. 22, the share price has grown to HK$5.77 (US$0.74), with Cheng earning around HK$2.5 billion (US$322 million) by purchasing nearly 30% of Shunfeng’s shares.

Now the industry wonders how Cheng will handle such a large amount of photovoltaic assets. An entrepreneur in Guangdong’s photovoltaic sector told the paper that as an investor, Cheng must believe the industry is recovering and is adopting a positive outlook.

Filed under Macro Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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