ANWELL: Solar plant on track; group posts HK$18.2 m profit in Q2

Another perspective of the Henan plant which sits on 130,000 sq m of land.

Photos by Kamal Samuel & Adrian Seah

ANWELL TECHNOLOGIES’ big ambition to be a global player in manufacturing solar modules is taking shape right now in Henan, China, as depicted by the picture above.

In the 130,000 sq m plant, which a group of Singapore analysts visited recently, Anwell and a Chinese partner will build China’s first fully automatic line for manufacturing thin-film solar modules.

Ken Wu, finance director of Anwell, said: "The plant, whose construction started in March this year, is on track to be operational by Q1 next year."

It is expected to generate revenue by 1Q09 with initial sales to Brazil Energy, a major holding and investment company in Brazil focused on the energy and infrastructure sectors.

Anwell has entered into a preliminary agreement with Brazil Energy for the sale of up to 5MW of solar modules.

Market prices for Anwell’s thin film modules are at US$2.50 per watt peak while production costs are at below US$1.

Anwell's production capacity will be expanded from 40MW to 120MW by 2010, and it aspires to be among the world's top 10 solar module producers by 2013.

Anwell - whose stock is listed on the Singapore Exchange - also has an agreement to develop and sell a solar module production line to Brazil Energy during the second half of next year (2009).

Franky Fan, CEO of Anwell. Photo: Anwell

"Brazil Energy approached us because of our strong presence in South America, where we have a 30% market share for DVD-R capital equipment," said Franky Fan, CEO of Anwell in an earlier interview with NextInsight.

”Solar technology has similarities to that for optical discs,” he explained, when asked how Anwell is using its technologies in the optical discs business for the solar business.

Anwell is the world's No. 2 manufacturer of equipment that replicates optical discs such as DVDRs and Blu-ray discs. It is the only such player that also has a optical disc manufacturing and trading arm.

This is Anwell's new plant in Dongguan, which is the result of consolidating its two plants. The equipment shown is for making solar modules. Photo: Anwell

Another pespective of the same solar equipment in Dongguan.

Q2 net profit of HK$18.2 million

Revenue for Q2 jumped 125% to HK$282 million, on the back of strong sales from the Group’s media products manufacturing and trading division which contributed HK$220 million in revenue in 2Q08.

The equipment-manufacturing business contributed the remaining HK$62 million.

Net profit attributable to shareholders was HK$18.2 million, compared to HK$2.5 million in Q2 last year.

Anwell is seeing the cashflow benefits of acquiring the media products manufacturing and trading division in Q4 last year.

The business has provided steady cash inflow, which is essential for the Group to invest in continuous research and development projects, both in the media products industry and new ventures such as the solar business.

Distribution expenses for 2Q08 were HK$16 million, 132% higher than the HK$7 million recorded in 2Q07. Administrative expenses for 2Q08 were HK$34 million, 159% higher than the HK$13 million recorded in 2Q07.

The higher expenses level was due to the consolidation of the media products manufacturing and trading business acquired in 4Q07.

Anwell finance director Ken Wu (facing camera, wearing glasses) shows Singapore analysts around the new Dongguan plant.

In the first half of this year, Anwell received HK$9.3 million worth of government subsidies, and expects such government support will continue with the aim of promoting Chinese equipment makers in high technology industries.

So far, the grants for Anwell have been used to fund the development of cutting edge technologies, such as Blu-Ray, Organic Light Emitting Diode (OLED) and solar technologies.

Last month (July), Chinese Premier Wen Jiabao visited the Group’s equipment manufacturing plant in Dongguan, China. He encouraged the Anwell team to continue its contributions to the solar energy sector in China.

Anwell stock recently traded at 5.5 cents, or a discount to its Net Asset Value of 8.46 cents a share.

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