Sunpower Group Ltd on SGX: 5GD. Is this worth buying now?

Sunpower group is a SG listed stock based in China. It is founded in 1997 an provides environment saving solutions and energy saving solutions around the world.

Sunpower has 11 GI (Green Investments) projects which primarily produces steam, heat and electricity for industrial use. In it’s manufacturing portion of the company, sunpower produces heat exchangers and pipes and also flare and flare gas recovery systems.

First let look at the share price. It is currently at $0.72. The 1 year range is from $1.03 to $1.03. So it is tight now somewhere in the middle. The price has been dropping in the last 1 week and has dropped about 14.8% from 1 month ago.

The latest quarter showed an earning of 85.2 million. Which is a 61% drop from 1 year ago.

Sunpower is currently trading at 1.56 Price to book value PB. This is more than the usual value of 1. While this is not absolute, it is important to see how much growth is expected. Sunpower has a 8% growth per annum front he past 5 years, so we do expect it to continue to grow at a good rate.

In terms of divided, sunpower provides a very Low divided of 0.4%. That merely means a token and anyone buying this stock believes that it has potential to growth to a much bigger and better company.

Lastly, the red flag is a whopping CN4.6b worth of debt. Which is a huge amount.

My view is that sunpower has the ability to shine through this period and emerge a huge winner. I will not be surprised if the stock rises above $1 in the next 1 year. However, the risk is huge and it has a huge debt to service. Businesses in china has also been less stable although this mainly applies to the tech sector, but sunpower will have a hit if China starts disregarding any need for environmental control in it’s industries.

In view of the above and merely from the fact that flare gases and thermal pipes are not something I am familiar with, I wouldn’t buy sunpower group anytime soon.

Tilt Lee
The above is my personal opinion which I am sharing for mutual learning. It should not constitute as an advice to but or sell any stocks.

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