Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a> reported FY20 results which showed record performance across GI and M&amp;S business. Nothing in today's release changes our long-term bullish thesis on the company.As announced earlier this year the company will separate the M&amp;S and GI businesses by late 1H21. As of 2H21 Sunpower will be a 100% GI story which should attract a higher multiple to a steady high cash flow generating business. Once the market understands this we think Sunpower re-rates significantly higher. That said, we continue to believe that 1H21 results could be messy as the separation takes place and investors could take a wait-and-see approach. The downside is capped by a special dividend of 0.2359 SGD (29.4% dividend yield on 0.80 SGD share price).Fair Value lowered from 1.42 SGD to 1.38 SGD (including special dividend payout), or another 78% total return upside.

Sunpower Group (SPWG SP) reported FY20 results which showed record performance across GI and M&amp;S business. Nothing in today's release changes our long-term bullish thesis on the company.As announced earlier this year the company will separate the M&amp;S and GI businesses by late 1H21. As of 2H21 Sunpower will be a 100% GI story which should attract a higher multiple to a steady high cash flow generating business. Once the market understands this we think Sunpower re-rates significantly higher. That said, we continue to believe that 1H21 results could be messy as the separation takes place and investors could take a wait-and-see approach. The downside is capped by a special dividend of 0.2359 SGD (29.4% dividend yield on 0.80 SGD share price).Fair Value lowered from 1.42 SGD to 1.38 SGD (including special dividend payout), or another 78% total return upside.

Sunpower: Good FY20 Figures; Now in Transition to 100% GI by 2H21. Risk/Reward Highly Attractive

<a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a> has been a long-time favorite and for years we have had a Fair Value estimate of 1 SGD. This target is now too conservative as the company announced it would sell its M&amp;S (Manufacturing &amp; Services) division and become a pure-play on GI (Green Investments). Please note we had been predicting this was an option in August 2020 <a href="https://www.smartkarma.com/insights/sunpower-spwg-sp-i-missed-it-no-it-is-just-beginning-strong-1h20-results-forecasted-next-week" target="_blank" data-smartkarma-citation="insights:41888" rel="noopener">Sunpower (SPWG SP): "I Missed It".NO, It Is Just Beginning. Strong 1H20 Results Forecasted Next Week</a> The M&amp;S division was valued at 2.29 billion RMB or about 50% of Sunpower's total market cap (if one uses the fully diluted share count). The net amount will be 2 billion RMB of which 66% will be paid out as a special dividend. Sunpower shareholders will receive a 0.2359/share special dividend (28% dividend yield).The deal conclusion might be a drawn-out process and this will likely make 1H21 results look "messy" but investors should now just focus on GI results going forward. Given the tone of the conference calls questions, we expect investors to need some time to get their heads around the transaction.<div class="content-highlight">
Sunpower's re-rating should now start in earnest as the GI business is like a utility business with great cash flow generation capabilities. The GI business has 30-year operating concessions and great visibility which is in contrast with the M&amp;S business which is short-term (contract by contract nature).
The GI business should now move to an NPV model (30-year concessions) and we raise our Fair Value to 1.42 SGD (inclusive of 0.28 SGD/dividend).
We, therefore, expect the stock to almost double again from current (0.74 SGD) levels. 
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Sunpower Group (SPWG SP) has been a long-time favorite and for years we have had a Fair Value estimate of 1 SGD. This target is now too conservative as the company announced it would sell its M&amp;S (Manufacturing &amp; Services) division and become a pure-play on GI (Green Investments). Please note we had been predicting this was an option in August 2020 Sunpower (SPWG SP): "I Missed It".NO, It Is Just Beginning. Strong 1H20 Results Forecasted Next Week The M&amp;S division was valued at 2.29 billion RMB or about 50% of Sunpower's total market cap (if one uses the fully diluted share count). The net amount will be 2 billion RMB of which 66% will be paid out as a special dividend. Sunpower shareholders will receive a 0.2359/share special dividend (28% dividend yield).The deal conclusion might be a drawn-out process and this will likely make 1H21 results look "messy" but investors should now just focus on GI results going forward. Given the tone of the conference calls questions, we expect investors to need some time to get their heads around the transaction.
Sunpower's re-rating should now start in earnest as the GI business is like a utility business with great cash flow generation capabilities. The GI business has 30-year operating concessions and great visibility which is in contrast with the M&amp;S business which is short-term (contract by contract nature).
The GI business should now move to an NPV model (30-year concessions) and we raise our Fair Value to 1.42 SGD (inclusive of 0.28 SGD/dividend).
We, therefore, expect the stock to almost double again from current (0.74 SGD) levels. 


M&S Div. Sold Resulting in 28% Special Dividend; Company Now 100% GI Story; Fair Value To 1.42 SGD

<a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a> delivered solid 9M20 results with earnings on track to meet its CB targets for FY20. 9M20 net profit was exactly 75% of its FY20 target and historically 4Q has been its strongest quarter. Sunpower should have no issue meeting FY20 consensus expectations.Sunpower has been a reliable revenue, EBITDA, and profit generator for two years now yet the market is valuing it at barely 9.7x FY21 earnings. As demonstrated in a recent insight <a href="https://www.smartkarma.com/insights/sunpower-read-across-from-buyout-of-zheneng-jinjiang-fair-value-remains-at-1-sgd-63-upside" target="_blank" data-smartkarma-citation="insights:44133" rel="noopener">Sunpower: Read Across from Buyout of Zheneng JinJiang; Fair Value Remains at 1 SGD (63% Upside)</a> this is too conservative.Sunpower bottomed on 23/03/20 at 0.33 and has since doubled. However, if we look at it YTD the stock is only up 4%. Given this is a 100% China domestic play and the Chinese economy is overall performing well there is a disconnect.Our Fair Value remains unchanged at 1 SGD (based on 15x FY21 earnings as agreed in CB1/CB2).

Sunpower Group (SPWG SP) delivered solid 9M20 results with earnings on track to meet its CB targets for FY20. 9M20 net profit was exactly 75% of its FY20 target and historically 4Q has been its strongest quarter. Sunpower should have no issue meeting FY20 consensus expectations.Sunpower has been a reliable revenue, EBITDA, and profit generator for two years now yet the market is valuing it at barely 9.7x FY21 earnings. As demonstrated in a recent insight Sunpower: Read Across from Buyout of Zheneng JinJiang; Fair Value Remains at 1 SGD (63% Upside) this is too conservative.Sunpower bottomed on 23/03/20 at 0.33 and has since doubled. However, if we look at it YTD the stock is only up 4%. Given this is a 100% China domestic play and the Chinese economy is overall performing well there is a disconnect.Our Fair Value remains unchanged at 1 SGD (based on 15x FY21 earnings as agreed in CB1/CB2).

Sunpower (SPWG SP): GI Continues to Deliver; Re-Rating to 1 SGD Just a Matter of Time

<a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Last week Sunpower Group (SPWG SP)</a> participated in a webinar with Smartkarma clients to talk about its performance in 1H20. The webinar recording is now available <a href="https://smartkarma.zoom.us/rec/play/icMBesc2gt5XZolN7q1Tc6_i_mBbBObSmhxOuo1NPDrjlY91-08sJAZ5udK8LcwZiv53qdzqBFApBjfN.XcuzG8EUxBJcGCVa?startTime=1601974812000" target="_blank" rel="noopener">here</a>. Yesterday, a waste-to-energy operator <a href="https://www.smartkarma.com/entities/zheneng-jinjiang-environment" target="_blank" data-smartkarma-citation="entities:22847:1" rel="noopener">China Jinjiang Environment (CJE SP)</a> announced CICC would act on behalf of its Shanghai-listed parent <a href="https://www.smartkarma.com/entities/zhejiang-zheneng-electric-a" target="_blank" data-smartkarma-citation="entities:20553:1" rel="noopener">Zhejiang Zheneng Electric A (600023 CH)</a> to privatize the company at 0.7781 SGD/share, a 43% premium over its closing price on 12/10/20.The buyout values the company at 36x earnings and 10x EV/EBITDA. Sunpower traded up 11% (0.61 SGD) in sympathy as investors rightly see these sorts of deeply undervalued businesses being scooped up by Chinese parents as confirmation of how undervalued some environmental protection businesses are.Sunpower reports 3Q20 results in approximately 30 days' time. We remain convinced Mr. Market is deeply undervaluing the company as its fair value remains at 1 SGD, or 63% higher from here.

Last week Sunpower Group (SPWG SP) participated in a webinar with Smartkarma clients to talk about its performance in 1H20. The webinar recording is now available here. Yesterday, a waste-to-energy operator China Jinjiang Environment (CJE SP) announced CICC would act on behalf of its Shanghai-listed parent Zhejiang Zheneng Electric A (600023 CH) to privatize the company at 0.7781 SGD/share, a 43% premium over its closing price on 12/10/20.The buyout values the company at 36x earnings and 10x EV/EBITDA. Sunpower traded up 11% (0.61 SGD) in sympathy as investors rightly see these sorts of deeply undervalued businesses being scooped up by Chinese parents as confirmation of how undervalued some environmental protection businesses are.Sunpower reports 3Q20 results in approximately 30 days' time. We remain convinced Mr. Market is deeply undervaluing the company as its fair value remains at 1 SGD, or 63% higher from here. 

Sunpower: Read Across from Buyout of Zheneng JinJiang; Fair Value Remains at 1 SGD (63% Upside)

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Welcome to Smartkarma Corporate Webinars, a new initiative by <a href="https://www.smartkarma.com/home/corporate-solutions/" target="_blank" rel="noopener">Smartkarma Corporate Solutions</a>. Every week, our Corporate Webinars will feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.For our first Corporate Webinar, we welcome <a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a>'s IR, <a href="https://www.smartkarma.com/profiles/gregory-yap-65df6807-3ee1-4782-902a-20ba1e80d918" target="_blank" rel="noopener">Gregory Yap</a>, who will deliver a presentation on the company and then join Smartkarma Insight Provider <a href="https://www.smartkarma.com/profiles/nicolas-van-broekhoven-24a66c2d-bca4-4f5b-adda-c4e2bcc509f4" target="_blank" rel="noopener">Nicolas Van Broekhoven</a> for a fireside chat. <h3>The Webinar will be hosted on Tuesday, 6/October/2020, 5:00 pm SGT/HKT.</h3><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=84275982499" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>Agenda:<ul>
<li dir="ltr">Company Presentation: Gregory Yap  -  20 minutes</li>
<li dir="ltr">Fireside Chat: Gregory Yap and Nicolas Van Broekhoven - 20 minutes</li>
</ul>Investors who want to reach out to Gregory for follow-up questions can do so via the "Contact IR" button on <a href="https://www.smartkarma.com/entities/sunpower-group-ltd" target="_blank" data-smartkarma-citation="entities:18395:1" rel="noopener">Sunpower Group (SPWG SP)</a>'s page on Smartkarma.

Welcome to Smartkarma Corporate Webinars, a new initiative by Smartkarma Corporate Solutions. Every week, our Corporate Webinars will feature discussions with Corporate IROs and Executives, discussing their companies, the challenges they face, and the opportunities in their sectors and markets.For our first Corporate Webinar, we welcome Sunpower Group (SPWG SP)'s IR, Gregory Yap, who will deliver a presentation on the company and then join Smartkarma Insight Provider Nicolas Van Broekhoven for a fireside chat. The Webinar will be hosted on Tuesday, 6/October/2020, 5:00 pm SGT/HKT.Register for the Webinar hereAgenda:
Company Presentation: Gregory Yap  -  20 minutes
Fireside Chat: Gregory Yap and Nicolas Van Broekhoven - 20 minutes
Investors who want to reach out to Gregory for follow-up questions can do so via the "Contact IR" button on Sunpower Group (SPWG SP)'s page on Smartkarma.

Smartkarma Corporate Webinar | Sunpower Group: Understanding the Business and Growth Opportunities

China

Sunpower Group Ltd. is an investment holding company that invests in, develops, and operates centralized heat, steam, and electricity generation plants in the People's Republic of China. It focuses on Green Investments (GI) business, supplying clean steam to industrial parks, providing civil heating, and selling electricity to the State Grid. The company was founded in 1997 and is headquartered in Nanjing, People's Republic of China.

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Sunpower (SPWG SP)

Sunpower: Good FY20 Figures; Now in Transition to 100% GI by 2H21. Risk/Reward Highly Attractive

Sunpower powers ahead with solid FY20 results. Investors should ignore the 4Q20 drop in revenues and profits and focus on the exciting split...

Nicolas Van Broekhoven

M&S Div. Sold Resulting in 28% Special Dividend; Company Now 100% GI Story; Fair Value To 1.42 SGD

Sunpower completes it transformation to become a 100% pure play on GI. While the transformation might look "messy" the eventual outcome should be...

Nicolas Van Broekhoven

Sunpower (SPWG SP): GI Continues to Deliver; Re-Rating to 1 SGD Just a Matter of Time

Sunpower continues to churn out solid results quarter after quarter. Stock only +4% YTD, despite being a 100% China domestic play. Fair Value of 1...

Nicolas Van Broekhoven

Sunpower: Read Across from Buyout of Zheneng JinJiang; Fair Value Remains at 1 SGD (63% Upside)

Read across from sector M&A highlights Sunpower undervaluation. We see 63% upside to our 1 SGD fair value estimate. The company reports 3Q20 in...

Nicolas Van Broekhoven

Smartkarma Corporate Webinar | Sunpower Group: Understanding the Business and Growth Opportunities

Welcome to Smartkarma Corporate Webinars, a new initiative by Smartkarma Corporate Solutions. Our Corporate Webinars

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