Gintech Energy and Tongwei Group reach a strategic partnership and private placement agreement

Release Date: 2015/07/20

Gintech Energy Corporation (“Gintech Energy”, or the “Company”, TWSE: 3514), a global leader in the PV industry, today announced that it has reached a strategic partnership and private placement agreement with Tongwei Group. This agreement leads Gintech Energy and Tongwei Group to expand the solar business globally. Under the agreement, Gintech Energy will offer 50 million shares to Tongwei Group. The total consideration will be NT$850 million in cash at NT$17 per share. After the placement, Tongwei Group will own approximately 10% of Gintech Energy.

Focusing its two core business on agriculture and new energy, Tongwei Group is a leading technologically advanced private enterprise. Chairman Hanyuan Liu is ranked in the top 100 of the Hurun Rich List in 2014 with a net worth of over 14 billion RMB. As a leading State enterprise company, the Tongwei Group operates nationwide in China as well as in Southeast Asia with over 130 branch/subsidiary companies and approximately 20,000 employees. Tongwei Co., Ltd., a large listed agricultural company (Stock Code: 600438 CH) controlled by Tongwei Group, is the world’s largest aqua feed manufacturer as well as major livestock poultry feed producer. Meanwhile, Tongwei Group strives to strengthen its competitiveness through huge investments in the polycrystalline silicon and solar PV industry. Tongwei New Energy focuses on the investment and the operation of downstream PV systems in the solar industry. It’s currently building over 200MW in “Fisheries & PV Integration Project”, “Agriculture + PV Complementation Project”, and roof-top power station projects in rural areas, etc.

Tongwei Solar, controlled by Tongwei Group, currently has a 2.3GW solar cell capacity, ranked as the 3rd largest solar cell producer in the world. With Gintech Energy’s 1.8GW solar cell capacity, the combined capacity of 4GW will make it the number one in the world. Furthermore, with the potential buildup of 1GW of solar cell capacity and 450MW of solar module capacity at Gintech (Thailand), the group’s solar cell capacity will even surpass 5GW. Tongwei Group and Gintech Energy will jointly support Gintech (Thailand) to become the leading solar player in Southeast Asia and deepen their footprint in the module business. Following the One Belt One Road strategy promoted by China, the group will further expand development in the Southeast Asia market.

In addition, Yongxiang Poly-Silicon, also controlled by Tongwei Group, has brought down its production cost to approximately US$11 per kilogram, among the lowest cost polysilicon producers in the industry. Gintech Energy will not only benefit from lower polysilicon and solar wafer costs, but also increase the synergies from vertical integration. Gintech Energy also thrives to increase conversion efficiency and promote high efficiency Diamond series products with plans to introduce the Diamond Module offering, which is expected to lower cost and increase profitability from all aspects. Gintech Energy believes Tongwei Group will bring more value to Utech Solar and Gintung Energy, subsidiaries of the Company, through its diversity in businesses.

More importantly, Tongwei Group has been promoting a “Fisheries & PV Integration” strategy. Among the 500 million mu of aqua culture water space in China, Tongwei Group controls approximately 10%, which can accommodate 100-150GW solar systems. Besides, Tongwei Group will utilize its 15,000 sales network for aquatic feed products to promote family distributed PV power generation systems in China-wide villages and counties. This expands its product channels and increases its asset value with 10-15% IRR target. In the long run, Tongwei Group plans to build 5GW large scale PV power generation plants in Sichuan and the whole country. Unlike other Taiwan peers who invest in solar cell production capacity in China, Gintech Energy will directly step into the enormous downstream system market in China with Tongwei Group’s massive demand for PV generation and it will largely improve its business outlook in the mid to long term.

Dr. Wen-Yen Pan, Chairman and Chief Executive Officer of Gintech Energy commented: “Tongwei Group has 15000MT polysilicon and 2.2-2.3GW solar cell capacity, and plans to build 10GW PV project in 3 to 5 years with its nationwide footprints in agricultural and property industries. Moreover, it expands business aggressively into international markets, aiming to become a global PV generation operator. We believe Tongwei Group will help Gintech Energy become the world-class solar PV enterprise and the world-class clean energy company with strong financial status and performances.”

“We are honored to be the first Taiwanese solar supplier to strategically cooperate with the Chinese leading solar company. By utilizing Tongwei Group’s strength and leadership in China’s new energy business, we are further penetrating into the Chinese market,” commented by Dr. Wen-Whe Pan, President and Chief Operation Officer of Gintech Energy. “As China has dominates the demand for PV products, we believe this alliance will enhance our industry status and directly benefit from the eager demand for clean energy in China. We expect to step forward in terms of market share and profitability with the strategic partnership.”

About Gintech Energy Corporation
Founded in 2005, Gintech Energy Corporation is committed to be a leading player in the solar energy industry. Gintech Energy’s mission is to deliver high quality solar products with world-renowned partners and to collaborate with leading international suppliers to bring cleaner energy to the world. For more information about Gintech Energy Corporation, please visit us at www.gintechenergy.com/en.

For further inquiries, please contact:
Evelyn Hung
Corporate Planning
Gintech Energy Corporation
Tel: +886-2-2656-2000 ext.8163
Fax: +886-2-2656-0583
E-mail: evelyn.hung@gintech.com.tw