China Singyes inches forward with spin-off of materials unit

China Singyes New Materials will pursue a listing on Hong Kong’s Growth Enterprise Market via a share offering, public placement and preferential offering to qualified shareholders. It aims to issue at least 25% of the enlarged number of offer shares up for grabs following the completion of the spin-off and listing plan, according to a statement to the Hong Kong stock exchange.

Existing shareholders can qualify for the preferential offering by submitting transfer forms and related share certificates to Tricor Investor Services — a subsidiary of Bank of East Asia — by July 5. However, the group still has yet to set a date for the proposed spin-off and listing and cautioned that it may not proceed with the plan at all. The proposal still needs to be approved by its board, the board of China Singyes New Materials and the stock exchange, it said.

If the proposed spin-off and listing proceeds as planned, China Singyes New Materials will become a non-wholly owned subsidiary of China Singyes Solar Technologies, which produces solar-powered street lights, bus shelters and pumps. Its quarterly and annual earnings will still be reflected in the financial results of its parent.

Additional information on the preferential offering will be announced when China Singyes New Materials — a producer of indium tin oxide film, polymer dispersed liquid crystal film electronically switchable glass (Smart Light-adjusting Glass), and smart light-adjusting projection systems — issues a prospectus for its proposed listing, or at some point shortly thereafter. However, the group did not indicate when that might transpire.

China Singyes Solar Technologies first announced its plan to spin off and list shares of China Singyes New Materials last September, via its sole sponsor, Hong Kong-based Octal Capital. The group owns 90.1% of China Singyes New Materials. Following the spin-off and listing, China Singyes Solar Technologies will solely focus on providing EPC services for solar developers.

The group recorded a profit of 512.5 million yuan ($75.04 million) in 2016, up from 357.4 million yuan in the preceding year. Revenue rose 25.3% on the year to 5.2 billion yuan, with revenue from its solar EPC business accounting for 42.8% of the total, at 2.2 billion yuan.

In December, it signed a $147 million deal with state-owned engineering firm Uzbekenergo to provide EPC services for a 100 MW solar project in Uzbekistan. The project — which is backed by the Asian Development Bank — is being built in Samarkand province.

In addition to EPC work, China Singyes Solar Technologies also develops its own PV projects. By the end of December 2016, it had 270.7 MW of solar connected to the Chinese grid, with an additional 73.4 MW of PV capacity pending grid connection.