Gigasun Ab · OMXSTO:GIGA
Gigasun Ab — Advanced SolTech Sweden — Investor Presentation (September 2020)
56 slides from Gigasun Ab's investor presentation, September 2020
Slide 1: Investor Presentation
Investor Presentation Advanced SolTech Sweden AB (publ) Convertible Preference Shares Up to SEK 150m Pre-IPO Financing September 2020
Slide 2: Disclaimer
Disclaimer This document is prepared by Advanced SolTech Sweden AB (publ) (the "Issuer") and is to be regarded as marketing material only and the information contained herein is offered to a limited group of potential investors. This document is not intended for the general public nor does it consti
Slide 3: Disclaimer (cont.)
Disclaimer (cont.) Distribution channel: In light of the target market analysis, the optimal retail distribution channel for the product is via sale by trading desk, online subscription, distribution through other investment firms, sale through other investment firms and unit link products. Any pers
Slide 4: Summary of risk factors
Summary of risk factors The risks listed below are just a summary of the headlines of the risks related to an investment in this equity financing. For a more extensive description of the risk factors that may adversely affect the Company, please see the section ”Risk Factors” below. RISKS RELATING T
Slide 5: Table of contents
Table of contents 6. Introduction 11. About ASAB 19. Portfolio and market 29. Economics 38. Risk factors 47. Appendix
Slide 6: Transaction summary
Transaction summary About Advanced SolTech Sweden AB (publ) Advanced SolTech Sweden AB (publ) (”ASAB” or the ”Company”) is a Swedish company founded in 2016, engaged in solar power production in China. ASAB group owns and manages approx. 143 MW of rooftop solar power facilities and sells the generat
Slide 7: Investment structure
Investment structure Return on investment Pay-off profile • By investing in the pre-IPO preference shares the 150% 145% investor will receive common shares at the IPO at a value corresponding to at least the original 130% investment + 15% (regardless of future share price) 125% 115% 115% • The inves
Slide 8: Terms in brief
Terms in brief* Issuer: Advanced SolTech Sweden AB (publ) Product: Convertible preference shares Currencies: SEK and EUR series preference shares Issue Size: Up to approx. SEK 150 000 000 (or equivalent in EUR) Minimum investment: SEK 1 100 000 or EUR 100 000 New number of shares: Up to 1 500 Nomina
Slide 9: Highlights
Highlights • An attractive investment opportunity in a fast-growing company with a solid business model • Return of 15% if an IPO takes place during the first 12 months after the closing date of the convertible preference share issue, and an additional 1,25% monthly from the 13th month and onwards O
Slide 10: Table of contents
Table of contents 6. Introduction 11. About ASAB 19. Portfolio and market 29. Economics 38. Risk factors 47. Appendix
Slide 11: ASAB at a glance
ASAB at a glance 2016 15 + SEK 1 000m 95 000 Founded by SolTech Energy and ASP Employees in Sweden and China Invested capital Tonnes of CO2 avoided annually 11
Slide 12: About ASAB
About ASAB About ASAB Management and board of directors • ASAB was founded in 2016 as a joint venture between SolTech Energy Sweden AB (publ) and Advanced Solar Power Hangzhou Co. Ltd. • The Group installs, owns and operates solar power facilities on its customer’s rooftops and sells the generated e
Slide 13: Group structure
Group structure Investments through subsidiaries Group structure • ASAB invests in new solar power facilities through its subsidiaries in China • The Company has local Chinese holding companies that are directly owned by Advanced Solar ASAB SolTech Energy Power (Hangzhou) • The subsidiaries ASRE and
Slide 14: Historical development
Historical development Timeline Issues another SEK First joint project is 105m of Senior launched Secured Green Bonds Three retail bonds are Exclusive two-year ASAB is founded and the issued, receiving the SEK 50 million invested contract signed with Planned pre-IPO equity first bond is issued to th
Slide 15: Business model
Business model Keys in ASABs business model Revenues Deals Strategy The Group receives its The Group always looks The Group uses third income from its solar for new deals through party EPC contractors panels producing power direct acquisition or to when installing the install new facilities on panel
Slide 16: Solar power production value chain
Solar power production Value chain Consumer ASAB Purchases and uses the power produced by the producer Power producer Sensitive to price changes from power producers as it has no Owns and manages the installations customer to transfer these to Pays the EPC contractor for installing EPC contractor th
Slide 17: Environmental factors
Environmental factors 1 produced MWh from solar power… …results in 13 times less CO2 emittance …saves emission of local dangerous compared to its coal equivalent particles …saves approx. 0,65 tonne in CO2 emissions …helps reduce smog and haze by replacing compared to the general Chinese electricity
Slide 18: Table of contents
Table of contents 6. Introduction 11. About ASAB 19. Portfolio and market 29. Economics 38. Risk factors 47. Appendix
Slide 19: Portfolio overview
Portfolio overview 103 17,8 years Current solar power facilities Average remaining maturity on rooftop contracts + SEK 2 400m Expected remaining income from current contracts + SEK 1 000m 143 MW Invested capital Total MW installed + 1 000 Customer’s average number of employees 19
Slide 20: Portfolio growth and backlog
Portfolio growth and backlog Portfolio growth Current backlog • Since the first installation was completed in 2015 the portfolio of solar power • The Group currently has 46 MW in signed orders facilities has been growing exponentially • The Group also has another 123 MW in its pipeline • At the end
Slide 21: Production output
Production output Production growth Continuously increased production • With the increased size of the Group’s portfolio, produced electricity has increased Quarterly production output (GWh) every quarter on a rolling 12 months basis 40 • Since 2017 the Group has produced approx. 180 GWh of electric
Slide 22: Pandemic effects
Pandemic effects Effects due to Covid-19 Robust development • The Covid-19 pandemic had some temporary one time effects on the Company’s Historical revenue development with Covid-effects development during H1 2020 138 140 10,5 • During the first quarter the annual holiday in conjunction with the Chi
Slide 23: Location
Location Located on the east coast Map of solar power facilities • Most of the Group’s customers are located on the east coast of China • The majority of solar power facilities are located in the Zhejiang and Jiangsu provinces • The Group’s Chinese office is located in Hangzhou, Zhejiang • The easte
Slide 24: Selected customers
Selected customers Jiangsu Yanghe Brewery Zhejiang Jindun Fire Control Equipment Co. Ltd • Listed Chinese wine & spirits producer with a • Established in 1998 market cap of + SEK 250bn and a profit of approx. SEK 10bn 2019 • Specialises in manufacturing a wide range of fire fighting equipment and pa
Slide 25: Market outlook
Market outlook Market growth Global investment in clean energy • Investments in renewable energy sources have tripled since 2006 $ Bn • China leads the way and has continuously increased their commitment to green Solar Wind Other Biofuels 400 technology and renewable energy 300 • In 2019, approximat
Slide 26: Market outlook (cont.)
Market outlook (cont.) Economic Growth drives demand GDP, China Population • The Chinese economy has been growing during a long period of time with high GDP ($ Bn) GDP-growth numbers, and early data suggest that the Chinese GDP has been (millions) affected less than other economies during the Covid-
Slide 27: Market outlook (cont.) - Top PV Markets
Market outlook (cont.) PV impact • In 2019, PV contribution saved as much as approx. 720 million tons of CO2eq • Equivalent to a 1,7 % reduction of global CO2 emissions • 54 % of the globally installed PV capacity has been installed in the past 3 years • China continues to be the world’s largest PV
Slide 28: Table of contents
Table of contents 6. Introduction 11. About ASAB 19. Portfolio and market 29. Economics 38. Risk factors 47. Appendix 28
Slide 29: Recent financial development
Recent financial development Development during 2020 Revenue development (SEKm) • The Group has been characterized by its significant growth in revenue and 160 operating profits • 2020 is the first year where ASAB consolidates the Group’s financial statements 140 135 • Revenues of the Group grew by
Slide 30: Financial highlights
Financial highlights due to economies of scale with larger Improved EBITDA-margin… as well as EBIT-margin… portfolio 90 100% 60 60% 120 60 56% 54 87% 90% 52 80 49 49% 100 50 79% 50 48% 50% 75% 80% 70 42 70% 80 40 60 40 40% 60% 31 50 60 30 50% 30 30% 40 38% 21 40% 40 17 20 16 30 20 20% 30% 13 10 20 2
Slide 31: Financing strategy
Financing strategy Margin improvement with size Potential margin expansion triggers • With the stable cash flows from the solar power facilities ASAB is much to be seen as a yield- arbitrage investor • A new solar power facility typically yields 12-16% annually on invested capital • The residual cas
Slide 32: Revenue from subsidies
Revenue from subsidies Dependence on subsidies Client cases • As the manufacturing process for solar cells becomes more efficient the Chinese Terumo Medical Products government is phasing out subsidies Client: (Hangzhou) Co., Ltd. • In 2016 a new solar power facility could expect a 20 year subsidy o
Slide 33: Illustration of financials
Illustration of financials Current portfolio* Invested portfolio • The below graph illustrates how revenues from a portfolio of 143 MW solar power • The Group received net liquidity of approx. SEK 92m after a subsequent bond issue facilities generate cash flow, excluding one-time costs on its green
Slide 34: Comps: Solar companies
Comps: Solar companies Key ratio Peers EV/ EBITDA EV / Market Capitalization 40 Company NTM EBITDA (MUSD) Etrion Corporation 21,6x 58,7 35 First Solar, Inc. 10,6x 7 728,0 Shanghai Aiko Solar Energy Co., Ltd. 36,8x* 4 094,3 Canadian Solar Inc. 7,0x 1 503,3 30 Solargiga Energy Holdings Limited 9,0x* 4
Slide 35: Comps: Energy sector
Comps: Energy sector Key ratio Peers EV/ EBITDA EV / Market Capitalization 30 Company NTM EBITDA (MUSD) RWE Aktiengesellschaft 7,8x 24 107,1 EDP - Energias de Portugal, S.A. 9,6x 18 758,4 25 Iberdrola, S.A. 10,4x 79 949,1 Electricité de France S.A. 4,7x 31 878,5 Tokyo Electric Power Company 6,8x 4 5
Slide 36: Comps: All
Comps: All Key ratio 40 EV/ EBITDA Avg. size Avg. size Avg. Avg. EV/EBITDA Log Mcap Solar companies Solar Energy companies 15,0x 1,9x 35 companies Energy 9,5x 3,4x companies 30 All 10,4x 2,8x comparables 25 20 Avg. multiple 15 Avg. multiple 10 5 Log Mcap 0 0 1 2 3 4 5 Source: S&P Capital IQ 2020-08-
Slide 37: Table of contents
Table of contents 6. Introduction 11. About ASAB 19. Portfolio and market 29. Economics 38. Risk factors 47. Appendix
Slide 38: Risk factors
Risk factors Introduction The risk factors in the section "Risks Relating to the Market and the Business Activities" below were prepared in connection with, and for the purpose of, the bond financing by Advanced SolTech Sweden AB (publ) (the "Issuer" and any other company in the group (the "Group")
Slide 39: Risk factors (cont.)
Risk factors (cont.) Interest rate risk The Group has incurred, and may in compliance with the limits set out in the final terms and conditions of the Issuer's existing bond financing further incur, financial indebtedness to finance its business operations. Such financing may generate interest costs
Slide 40: Risk factors (cont.)
Risk factors (cont.) Executive management, staff and operational risk ASRE and LSE Suqian rely on consultants for certain services. Advanced Solar Power (Hangzhou) Inc. ("ASP") is ASRE’s former shareholder and currently is an affiliated company of ASRE and LSE Suqian. To a large extent ASRE and LSE
Slide 41: Risk factors (cont.)
Risk factors (cont.) Delays and use of products in the connection to the electricity grid ASRE and LSE Suqian design their installations to suit customers' electricity consumption. In short, ASRE's and LSE Suqian’s aim is not to deliver electricity to the grid, but it needs the grid connection to se
Slide 42: Risk factors (cont.)
Risk factors (cont.) Risks relating to projects acquired by ASRE or LSE Suqian Some companies/assets which ASRE or LSE Suqian may acquire or have acquired (“Target Companies”) may have long term receivables. It is possible that these receivables may not be collected in the end since the counterparti
Slide 43: Risk factors (cont.)
Risk factors (cont.) Risks from legal and arbitration proceedings As of the date of this presentation, there are no existent or pending legal or arbitration proceeding to which any member of the Group is a party. Nevertheless, it cannot be ruled out that the Group or any of its members will not be i
Slide 44: Risk factors (cont.)
Risk factors (cont.) Risks relating to the Coronavirus disease (COVID-19) The 2019 novel coronavirus ("COVID-19") outbreak is currently having an indeterminable adverse impact on the world economy. COVID-19 was reportedly first discovered in Wuhan, Hubei Province, China, in 2019, and the World Healt
Slide 45: Risk factors (cont.)
Risk factors (cont.) Exchange rate differences can have a negative impact on dividends paid Any dividends shall be in both SEK and EUR. This means that shareholders may have an adverse effect on the value of holdings and dividends when these are converted, depending on the exchange rate and date, fr
Slide 46: Table of contents
Table of contents 6. Introduction 11. About ASAB 19. Portfolio and market 29. Economics 38. Risk factors 47. Appendix
Slide 47: Terms for convertible preference shares
Terms for convertible preference shares Issuer: Advanced SolTech Sweden AB (publ) Product: Convertible Preference Shares The company and the main owners may invite additional investors into the company on terms they consider appropriate provided any such additional Currencies: SEK series preference
Slide 48: Terms for convertible preference shares
Terms for convertible preference shares Each preference shareholder must issue a power of attorney to the main owner for the main owner to attend and vote at shareholders' meetings, to give effect to the shareholders' agreement (including to convert shares in connection with an IPO), which will appl
Slide 49: Financial statements
Financial statements Advanced SolTech Sweden AB (publ) Income Statement* ASAB Group ASAB Group (SEK 000’) Q2 2020 H1 2020 Revenue 26 286 36 738 Other operating income 20 673 25 234 Total income 46 959 61 972 Operating expenses Other external expenses - 4 566 - 5 199 Personnel expenses - 1 436 - 2 75
Slide 50: Financial statements (cont.)
Financial statements (cont.) Advanced SolTech Sweden AB (publ) Balance sheet* ASAB Group ASAB Group Balance sheet (cont.) ASAB Group ASAB Group (SEK 000’) 2020-03-31 2020-06-30 (SEK 000’) 2020-03-31 2020-06-30 ASSETS ASSETS (cont.) Fixed assets Current assets Intangible assets 64 273 44 914 Inventor
Slide 51: Financial statements (cont.)
Financial statements (cont.) Advanced SolTech Sweden AB (publ) Balance sheet* ASAB Group ASAB Group Balance sheet (cont.) ASAB Group ASAB Group (SEK 000’) 2020-03-31 2020-06-30 (SEK 000’) 2020-03-31 2020-06-30 EQUITY AND LIABILITIES EQUITY AND LIABILITIES (cont.) Equity Long-term liabilities Share c
Slide 52: Financial statements (cont.)
Financial statements (cont.) Advanced SolTech Sweden AB (publ) Cash flow analysis* ASAB Group ASAB Group (SEK 000’) Q2 2020 H1 2020 Earnings before financial items 31 980 35 328 Adjustment for depreciation 9 377 19 081 Adjustment for items not affecting the cash flow 0 0 Total 41 357 54 409 Received
Slide 53: Owners
Owners SolTech Energy Sweden AB (publ) Board and management SolTech • SolTech is a Swedish company listed on Stockholm First North stock exchange Anna Kinberg Batra – Chairman of the board Stefan Ölander – CEO and board member with a market capitalization of approx. SEK 1 280m (2020-09-07) • Party l
Slide 54: Owners (cont.)
Owners (cont.) Advanced Solar Power (Hangzhou) Co. Ltd. Key takeaways – ASP • The ASP-group owns 49% of ASAB and is a solar cell producer Financials 2019** • The company was founded in 2007 by professor Xuanzhi Wu and Ben Wu based ✓ Revenue of SEK 470m on professor Wu’s longstanding research on sola
Slide 55: Operational and financial assumptions
Operational and financial assumptions The illustrations carries a lot of assumptions, including assumptions of the portfolio, F/X-rates and costs. Any change in these assumptions, or performance below or above the assumptions will affect the illustration. Some key assumptions are: • RMB/SEK 1,25 • E
Slide 56: Advanced Soltech
J Advanced Soltech
Advanced SolTech Sweden — Investor Presentation (September 2020) on 6ix