The news: Solyndra LLC, a California solar-panel maker once hailed by President Barack Obama as "the future" of clean energy, filed for bankruptcy. The company owed lenders US$783.8m, including US$527.8m to the U.S. government, and held assets valued at US$859m as of Jan 2011. Solyndra explained that it could not compete with the foreign manufacturers funded by local governments which are able to sell their panels at low prices with lengthy payment terms. Meanwhile, FBI is currently investigating into the matters on whether Solyndra’s executives knowingly misled the government in order to secure the federal loan back in 2009.
Our thoughts: Singapore listed company Cheung Woh Technologies (UNRATED) made an announcement yesterday that the Solyndra’s bankruptcy would impact negatively on the group’s financial performance. The contingent losses amounted to S$1.7m will be provided in 2QFY11. We reckon that the incident is one-off and will not affect Cheung Woh’s mainstay business. The group currently has a diversified customer portfolio with 85% of the FY10 revenue generated from the HDD and Automotive customers. Meanwhile, the news also indicates a worrying sign for other solar-panel makers in the market, especially the smaller one who do not have the resources to compete. We noted that Anwell Technology (UNRATED), a Singapore listed solar thin-film panel maker, had recently received RMB700m (S$132.1m) capital injection from the municipal government despite having a market capitalisation of S$96m. The group made huge losses last year and has yet to turn around.
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