Our reporters Zhang Yingying and Wu Kezhong report from Beijing
On the evening of May 30, TCL Zhonghuan (002129.SZ) announced its participation in the restructuring and foreign investment of Maxeon (NASDAQ: MAXN), saying that based on the globalization strategy and the call for deepening international cooperation in new energy technology innovation, it intends to achieve a controlling stake in Maxeon through a package of restructuring transactions such as convertible bonds and private placements, with a total amount of no more than $197.5 million.
The reporter of "China Business Daily" noted that this is not the first time that TCL Zhonghuan has invested in Maxeon, which is an important part of its expansion of the battery module market and the implementation of its globalization strategy.
TCL Zhonghuan said that after controlling Maxeon, it will promote the improvement of its capital structure, business transformation and operation, give full play to its unique market advantages and technological innovation capabilities, and enhance the competitive advantage of the company's global layout through the mutual promotion and collaborative empowerment of production and channels around the world.
Invest moreMaxeon is a new company after the spin-off of SunPower and has its registered address in Singapore. According to the previous TCL Zhonghuan announcement, Maxeon's main business includes the original SunPower's global production and sales network and patents in addition to the United States and Canada, and its entities mainly include Singapore headquarters and R&D centers, battery factories in Malaysia and the Philippines, cell and module joint venture factories in China (Huansheng Solar), module factories in Mexico and France, sales centers in Switzerland and sales companies in more than 10 countries.
In August 2020, Maxeon was listed on the NASDAQ stock exchange in the United States, mainly responsible for the design, manufacture and sales of photovoltaic modules (mainly shingled modules and IBC modules) under the Maxeon and SunPower brands, and its business covers Africa, Asia, Oceania, Europe and the Americas, with a focus on the global photovoltaic rooftop and power station markets.
The reporter combed through the relevant announcements and found that since 2019, TCL Zhonghuan has continued to strengthen its control over Maxeon since it participated in the subscription of Maxeon shares, and has continuously increased its investment in Maxeon by participating in convertible bonds and private placements.
In November 2019, TCL Central subscribed for approximately 28.85% of Maxeon's shares, becoming its second largest shareholder. As of May 30, 2024, TCL Zhonghuan has held about 12285692 shares of MACN, with a shareholding ratio of about 22.39%, making it its largest shareholder. If the package restructuring transaction is completed, TCL Zhonghuan's shareholding ratio will increase from 22.39% to at least 50.1%, and MAXN will be incorporated into the consolidated financial statements of TCL Zhonghuan and become its holding subsidiary.
As the Maxeon package restructuring transaction involved external regulatory approvals and the restructuring of Maxeon's existing debts, the overall transaction was implemented gradually and step-by-step, and a variety of different investment vehicles (convertible bonds, private placements, etc.) were used to finally conclude the acquisition of Maxeon by TCL Zhonghuan Holdings.
Specifically, the Maxeon restructuring is a consensual restructuring with the consent of holders of approximately 98% of the 2025 convertible bonds. In this package of transactions, TCL Zhonghuan intends to subscribe for Maxeon's new first priority guaranteed convertible bonds with its own funds of US$97.5 million, and the subscription entity is the company's wholly-owned subsidiary, ZHONGHUAN SINGAPORE INVESTMENT AND DEVELOPMENT PTE. LTD. (Chinese: Zhonghuan Singapore Investment and Development Pte Ltd, hereinafter referred to as "Zhonghuan Xintou"), TCL Zhonghuan increased its capital by US$100 million to its wholly-owned subsidiary, Zhonghuan Xintou, to subscribe for new shares issued by Maxeon.
According to the data, as of December 31, 2023, Maxeon had total assets of $1.002 billion and net assets of $460 million. During the reporting period, Maxeon achieved an operating income of US$1.123 billion and a net profit of -US$28 million, which continued to lose money compared with 2022.
Not only that, due to factors such as the decline in industrial market prices and the drag on Maxeon's performance, TCL Zhonghuan will encounter a decline in operating income and net profit in 2023, and will lose nearly 900 million yuan in the first quarter of 2024.
Taking 2023 as an example, the performance and stock price of Maxeon's products fell sharply during the reporting period due to the rapid decline in PV product prices, the adjustment of PV subsidy policies and the high interest rate environment, as well as the slow transformation of its own operations. Based on the principle of prudence, the asset impairment loss of RMB1.01 billion and the fair value change loss of RMB440 million were recognized for the long-term equity investment and financial assets related to TCL Zhonghuan, respectively, which had a significant negative impact on TCL Zhonghuan's performance.
TCL Zhonghuan told reporters: "At present, Maxeon's operating performance has indeed been affected to a certain extent. In the future, if we achieve a controlling stake in it, we will strive to improve it and are confident that it will boost its performance. ”
Valuing the advantages of patentsFrom TCL Zhonghuan's shareholding in Maxeon to the proposed holding of Maxeon, the reason behind it is inseparable from a series of patents and globalization capabilities mastered by Maxeon, which is also in line with TCL Zhonghuan's globalization plan.
TCL Zhonghuan said that Maxeon has IBC cell-module series patents, TOPcon battery process series patents, and shingled module series patents, forming a strong ability to protect intellectual property rights and related products in the world, and has a strong global brand and channel advantages, which is an important strategic fulcrum for TCL Zhonghuan to deeply participate in the international energy transition.
From the perspective of product structure, TCL Zhonghuan's main products include the development and operation of new energy photovoltaic silicon wafers, photovoltaic cells and modules, other silicon materials and high-efficiency photovoltaic power station projects. By the end of 2023, TCL Zhonghuan has 18GW of module production capacity in addition to 183GW of wafer production capacity.
For a long time, TCL Zhonghuan has participated in market competition with a differentiated strategy, and has deployed battery modules through Huansheng PV. The company has previously introduced SunPower's global patented shingled module technology, becoming the only manufacturer in China that has obtained legal intellectual property licensing, and its module products are mainly based on the layout of patented shingled module technology. As a "catch-up" in the module field, Huan Sheng PV has not yet entered the top 10 list in the world.
It is reported that Maxeon (at that time by SunPower developed the first generation of IBC batteries) took the lead in developing IBC technology and achieved large-scale mass production, the company has independent intellectual property rights of IBC series battery technology, which is also valued by TCL Zhonghuan.
TCL Zhonghuan told reporters: "When I invested in Maxeon in 2019, I was more optimistic about the direction of IBC technology, including the company's TOPcon battery project in Guangzhou, which also retains the interface to upgrade to the BC direction. We are optimistic about and recognize Maxeon's leading position and patent layout in the direction of IBC technology, and the company has always maintained technical exchanges. ”
It is worth mentioning that IBC and TOPcon are both the new generation of battery technology that domestic photovoltaic enterprises focus on the layout. There are many TOPcon layouts, including JinkoSolar, JA Solar, Trina Solar, Tongwei, LONGi Green Energy and many other companies; There are relatively few IBC layouts, which are currently represented by LONGi Green Energy and Aixu.
As the market becomes more and more competitive, patent disputes between Maxeon and domestic and foreign PV companies often attract attention. Focusing on the patent infringement issues of IBC, TOPcon and shingling technology, Maxeon has filed lawsuits against domestic companies or related parties such as Aiko Co., Ltd., Canadian Solar, Tongwei Co., Ltd., and foreign REC companies.
As a shareholder of Maxeon, TCL Zhonghuan has always fully supported Maxeon's rights protection activities. "Respecting and protecting intellectual property rights is essential for the orderly and sustainable development of the PV industry. The company always believes that respecting intellectual property rights is to maintain market order. TCL Zhonghuan believes.
(Editor: Dong Shuguang Review: Wu Kezhong Proofreader: Yan Yuxia)