TekSeng ... A Major Solar Player In Malaysia

It has been principally engaged in the manufacturing and trading of PVC and PP non woven related product.

While strengthening the core business, TekSeng has embarked on a diversification strategy. Since 2012, the company has been engaged in the manufacturing and sales of PV products – solar cells, panels and modules – to capitalize on the growing worldwide demand for clean, efficient and renewable sources of energy.

Its solar business subsidiary, TS Solartech opeatess in Penang Science Park.

On Sept 2014, it had entered into a MOU with Taiwan listed SEC that will invest rm100 million in TS Solartech. In the same deal, SEC also sold two solar cell turnkey lines to TekSeng. A leading German solar power player, Schmid is the technology partner for the new venture. The rm87 million investments for two new production lines would be ready by Feb 2014 and April 2015.

TekSeng expects its solar cell business to contribute more than 50% of group revenue for 2015.

TekSeng will be a beneficiary from trade disputes as the US Intl Trade Commission has imposed anti dumping countervailing duties against China and Taiwan;s solar markets. As such, SEC has roped in TS Solartech as a manufacturing partner to sidestep the trade barriers. TS Solartech will gain immensely from this partnership as Taiwanese solar players are already established globally.

With the injection of SEC’s investment, TekSeng has established itself as a major solar player in Malaysia. TekSeng can then ride on the growing demand for its PV productst.

TekSeng past and current earnings are wholly anchored on the traditional PVC segment.

The company has a dividend payout ratio of at least 30% of the group net profits from financial year 2015 onwards.

One of the risk factors is that prices for PV products are exposed to the vagaries of demand and supply. It also face fluctuations in raw material prices such as resin and silicon wafers too.

It has proposed to undertake a corporate exercise to issue 120 million free bonus warrants with an exercise price of rm0.25. it will raise additional capital when the issued warrants are exercised. This is an attractive proposition to shareholders as the free bonus warrants will lower the cost of acquisition of the shares.