Shunfeng Optoelectronics issued a huge debt to bet on solar energy

After acquiring Wuxi Suntech, the ambition of Shunfeng Optoelectronics in the field of photovoltaics continues to expand. A few days ago, Shunfeng Optoelectronics once again issued a debt-issuing announcement that the company plans to issue a convertible bond with a total amount of not more than HK$2.3 billion, with an annual interest rate of 4%. The company stated that the entire proceeds from the issuance of the debt will be used for capital expenditures on its existing solar projects and for general corporate purposes.

As of March 23 this year, Shunfeng Optoelectronics has realized a total installed capacity of 890 MW in grid-connected power generation with an annual design capacity of 1,718 megawatts. Previously, Shunfeng Optoelectronics purchased Suntech Suntech for 3 billion yuan, one of which was to use the latter to strengthen its solar product production capacity. After reaching the upper reaches, the downstream ambitions of Shunfeng Photovoltaic Co., Ltd. grew more and more. For this reason, the company's fund-raising actions were quite frequent.

The reporter noted that in June last year, the company issued a convertible bond of HK$931 million to PeaceLink, which was mainly used for the development and construction of solar power stations. In November of the same year, a further convertible bond of HK$3.58 billion was proposed to be issued, which has not yet been completed. It is used as a proposed acquisition of Wuxi Suntech.

Datong Securities analyst Fu Yongji analysis believes that the initial investment in photovoltaic power plant projects is very large, and it does require large-scale enterprises**. Looking at the performance of Shunfeng Optoelectronics, its 2013 loss was about RMB 1.818 billion, a substantial increase from the loss of RMB 271 million in 2012. In this performance, issuing bonds has become an important way to increase the number of power stations. “However, photovoltaic power plants also have the characteristic of long return on investment, and corporate debt is still facing the risk that market uncertainty may bring to corporate capital.” Fu Yongsheng said.