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May 30, 2017

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Sino-American Silicon shares up on buy-in deal

TAIPEI -- Shares of Sino-American Silicon Products Inc., one of Taiwan's leading solar-grade crystalline silicon wafer suppliers, moved higher Thursday morning on a deal in which its subsidiary will buy part of a Germany-based solar module maker's assets, dealers said.

The buying reflected optimism that Sino American Silicon will take advantage of the deal to grasp a larger share of the solar energy market in Germany, one of the major green energy consumers in the world, the dealers said.

As of 11:44 a.m., shares of Sino-American Silicon had added 2.09 percent to NT$58.50 (US$1.93), with 10.50 million shares changing hands. The weighted index on the Taiwan Stock Exchange was up 0.63 percent at 8,316.69 points.

"Sino-American Silicon targeting the European market by producing and selling products in the region is a positive step," Grand Fortune Securities analyst Chen Wei-tai said.

A statement released by Sino American Silicon said that SCP Solar GmbH, a consortium established by its solar cell subsidiary Sunrise Global Solar Energy Co., along with Choshu Industry Co. and Pan Asia Solar Ltd., has agreed to buy a significant part of Germany's Aleo Solar AG assets.

Currently, Sino-American Silicon holds a more-than 50 percent stake in Sunrise Global Solar Energy, shares of which are traded on the local emerging stock market.

The deal will cost the consortium only a symbolic price of 2 euros (US$2.7), as Aleo Solar's major shareholder, Robert Bosch, is eager to dispose of the financially troubled assets.

Under the deal, SCP Solar will purchase Aleo's module production assets located in the German city of Prenzlau, such as fixed assets, inventories, trademarks and other intellectual property rights, while the consortium will retain 200 Aleo employees.

Aleo has agreed to pay SCP a negative purchase price of 10 million euros and 11.5 million euros as working capital. The deal is expected to be completed in May.

"Judging from the financial terms of the deal, I think the acquisition price is very good for Sino-American Silicon. That's why many investors took cues from the deal to buy into the stock at a time when the broader market staged a technical rebound from yesterday's plunge," Chen said.

"More important, Sino-American Silicon is able to use the production in Germany to shun any punishment in the EU, where negative sentiment toward Asian solar energy firms against dumping and government subsidies is on the rise," Chen said.

But Chen also said investors should stay alert when buying local solar energy stocks, which have gained significantly in recent sessions.

"I think Sino-American Silicon shares could face stiff technical resistance at around NT$62.50 in the short term," Chen said.

Meanwhile, Solartech Energy Corp., a Taiwan-based solar cell supplier, posted NT$857 million in consolidated sales for January, hitting a monthly record high in 29 months.

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