Why should investors take a risk on little-known Jetion, when there are larger and longer-established solar cell makers in the west?
The company makes the now-familiar argument that because it manufactures in China, it has several advantages over western competitors: lower tax rates, low labour costs and strong levels of support from the Chinese government.
The company also claims its cells offer higher conversion efficiency rates — the fraction of solar energy that gets converted into electricity. While the industry average is 15%, Jetion claims it can achieve 17.6%. Three patent applications for its fabrication process have been lodged in China and Jetion intends to lodge another nine patent applications.
Other producers in the sector sub-contract elements of their production processes to Jetion, which the company argues shows the strength of its technology.
Dipesh Shah, former head of the UK Atomic Energy Authority, has been appointed as executive chairman to give some gravitas to the company's board.
As with other solar cell makers, Jetion cautions investors about the worldwide shortage of solar-grade silicon, the principal raw material in the production process. Nevertheless, it says it has agreements in place for the supply of solar-grade silicon wafers in sufficient quantities to meet all of its anticipate production needs for 2007 through to 2009.
It has also entered into a number of forward sale agreements with long-term purchasers of its products that provide “extremely good visibility” of its likely revenues for 2007 through to 2009.
Jetion has been trading for less than two years, but in its filing, it says it is already profitable with revenues in excess of $45.5m for the year ended 2006, during which time it operated with only one 25MW production line. Its factory, in Jiangyin, Jiangsu province, now has a second production line which takes Jetion's production capacity to 50MW a year.
By 2008, it hopes to open two more lines and double production to 100MW.
Collins Stewart Europe is the nominated advisor and broker to Jetion.
Elsewhere on the China solar front:
ReneSola, a Chinese solar energy manufacturer listed on Aim, reported second-quarter output of 23MW, short of the planned production due to the temporary shutdown of a furnace, which is being modified to make larger wafers. ReneSola seeks to get round the worldwide shortage of solar-grade silicon by recycled wafers rejected by the semiconductor industry. More on ReneSola in this EngagingChina story.
China Sunergy is yet another Chinese solar energy play that has chosen to list in the west, this time on Nasdaq. Its first financial results since its IPO May reveal that it produced 20MW of solar cells in the second quarter, almost double the figure in the year-earlier same period. Tight silicon supplies put pressure on margins and the company is looking for new sources of the “precious” metal. Nanjing-based China Sunergy entered into a 10MW sales contract with Solarwatt of Germany and hopes to grow European sales to represent approximately 30% of overall sales in 2007.
NYSE-listed Trina Solar reported a 194% year-on-rise in revenues to $42.5m in its first quarter. The Changzhou-based solar manufacturer tripled Q1 shipments to 10.5MW compared to the 3.3MW shipped in the year-earlier Q1. Annualised production was 100MW at the end of the quarter, which the company hopes to ramp to 150MW by the end of this year. It is also trying to boost its cell efficiencies to 16.5% by that date. More results here.