Comtec signals H1 turnaround, moves on downstream deals

The Chinese integrated PV specialist — which suffered a full-year net loss of roughly CNY 1 billion in 2016 — expects earnings before interest, taxes, depreciation, and amortization (EBITDA) to hit CNY 49 million in the January-June period, based on a preliminary review of its unaudited results. In the first half of 2016, it recorded an EBITDA of about CNY 29.2 million.

Comtec Solar attributed its strong performance in the first half of this year to its intensified focus on downstream solar project development, which offers higher margins than its traditional PV manufacturing business. A jump in subsidy income has also helped the company to bounce back from the losses of last year, according to a statement to the Hong Kong stock exchange.

The Shanghai-based group — which produces solar wafers and ingots — also revealed this week that it has decided to issue 241,567,690 consideration shares as its first payment to acquire Comtec Renewable Energy, formerly known as Joy Boy HK. Comtec Solar finalized the terms of its agreement last year to buy Joy Boy HK, which offers unspecified PV development services throughout China.

Comtec Solar determined the size of the planned share allotment based on Joy Boy HK’s profit before taxation for the year to the end of June 2017. The acquisition target likely finished working on the development of 70 MW of solar in the year to the end of June 2017 and is expected to complete 300 MW of additional PV capacity through the end of June 2019.

“The completion of the proposed acquisition marks the beginning of the group’s expansion into the business of downstream solar project development,” Comtec Solar said.

The company also revealed plans this week to issue 320,223 shares as payment of the first instalment of its purchase of a stake in residential PV installer Forum (Asia). In an arrangement that is similar to its acquisition of Joy Boy HK, Comtec Solar based the decision to issue consideration shares on an assessment of Forum’s profit before taxation in the six months to the end of June. Comtec first announced the planned acquisition last November.