July Stock Alert! SSIE
SUNSI ENERGIES
(OTC: QB – SSIE – $3.55)
SUNNY DAYS AHEAD
SunSi-SSIE, is Best Way to Play the Solar Market and the only Pure Play, Publicly-Traded TCS Provider.
TCS is the most critical raw material in the solar industry.
SunSi is fast-growing, profitable, and has no long-term debt
Zacks Research just raised its rating on SunSi to Outperform
Goldman Small Cap Research has a $6.00 year-end target
Goldman also predicts $45M in sales and $0.13 EPS in 2011
For 2012, Goldman forecasts $140M in revs and $0.46 EPS
The chart on SSIE looks phenomenal and both volume and the share price are on the rise:
SunSi has issued a number of very positive press releases and the future looks optimistic.*
SunSi’s Business
Based in New York, SunSi Energies, Inc. (OTC: QB – SSIE – $3.55) has operations in China that produce a specialty chemical known as Trichlorosilane (TCS). TCS is a compound critical to the production of extremely pure polysilicon, from which solar photovoltaic (PV) cells and other products are made. In fact, between 70-75% of all solar panels in use today are made with PV cells. SunSi sells the TCS to the world’s leading PV cell manufacturers.
Not only is TCS the most important material used in the production of PV, but also it is also the most profitable in the entire solar food chain!!!
SunSi already has 15% of the market in China, the most important PV market in the world, where most of the products are produced. Labor is cheaper, production experience is vast, and SunSi’s facilities are close to the important customers.
Through organic growth and M&A, SunSi is well positioned to dominate this space and become the world’s largest supplier of TCS in the next few years.
Huge Industry Growth
Industry research firm SolarBuzz predicts that the solar panel growth will double from 2009 – 2014. As part of China’s alternative energy investment mandate, the TCS market in China will grow by five-fold by 2020.
SunSi is in great shape. With an estimated 65% of global solar production capacity, China is the place to be for solar production.
The appetite for alternative energy and the consumption of solar power in particular is climbing rapidly. This is especially the case in the U.S. Huge solar farms are cropping up all over and the residential solar energy installation is on a huge upswing.
There are some serious drivers to this market. Government subsidies, falling equipment prices, super-low interest rates and now broad-based financing options have had a substantial effect on the U.S. solar business. Companies such as Google are providing financing and utilities are investing in solar power installers and operators. More and more citizens are leasing solar systems. It’s just like leasing a car!
SSIE in Major Expansion Mode
SunSi currently controls an estimated 45,000 metric tons (MT) of TCS production through its existing facilities. At the end of 2010, SunSi HK (a SunSi subsidiary) completed the acquisition of 90% of Zibo Baokai Commerce and Trade Co. (“Baokai”), a distribution company. With this acquisition, SunSi gained exclusive rights to distribute 25,000 MT (metric tons) of TCS produced by the Zibo Baoyun Chemical Plant (“ZBC”) located in Zibo China for both the local Chinese and the international markets. This created a major foothold for SunSi in the Chinese TCS market.
In March 2011, SunSi HK completed the acquisition of 60% of Wendeng He Xie Silicon Co. Ltd (“Wendeng”) located in Weihai City, which brought SunSi an additional 22,000 MT in capacity.
SunSi is currently undertaking a facility expansion, which will increase capacity by almost 50% to 30,000 MT, by the end of July 2011. A second capacity expansion at the Wendeng facility will commence in July 2011. The total expansion that is expected to be completed in early 2012 will increase Wendeng’s capacity to 75,000 MT.
Just last month, SunSi fulfilled its Wendeng acquisition payment obligation. The 40% equity shareholder in the facility opted to retain his $2.7M in redeemable SunSi stock. This eliminates the need for SunSi to raise $2.7M and is major demonstration of confidence in SunSi management and the stock.
Impressive Growth: Check Out These Numbers
In the Company’s fiscal 3Q11, SunSi recorded $4.6 million in revenue for its first quarter following the Baokai acquisition. For 4Q11, management already announced revenue guidance of $11.0 – $13.0 million and $0.01 – 0.02 in EPS. Goldman Small Cap Research projects revenue of $45 million and EPS of $0.13 for 2011 and $140 million in revenue and $0.46 in EPS in 2012.
That means the stock is trading less than 8x 2012 EPS even though revenue and EPS could triple from this year’s levels!!!
There are approximately 30 million shares outstanding, which gives SunSi a market capitalization just under $100M. Investors do not have to worry about major dilution around the corner or crippling debt. The capital structure is clean. There are no options, no warrants, and no long-term debt.
Recent News
The news coming out of SunSi over the past three months has been stellar and offers very sunny days ahead. Here are highlights from key releases and events.
June 22, 2011
SUNSI SIGNIFICANTLY IMPROVES LIQUIDITY WITH $5.0 MILLION IN NEW FUNDING INITIATIVES
Over the past three months, SunSi has raised the equivalent of approximately $5.0 million through cash received from equity sales of $635,000, common stock subscription commitments of $1,750,000, as well as from the conversion of $2.7 million in redeemable stock to common equity by SunSi’s 40% equity partner of the Company’s Wendeng facility located in Weihai City, China.
June 18, 2011
SUNSI ENERGIES, INC. FEATURED IN
INVESTOR’S BUSINESS DAILY ADVERTISEMENT
June 16, 2011
Zacks Raises Rating on SSIE to Outperform
http://finance.yahoo.com/news/Zacks-upgrades-SunSi-to-zacks-1580209045.html?x=0&.v=1
June 15, 2011
SUNSI FULLFILLS WENDENG ACQUISITION PAYMENT OBLIGATION
$2.7 MILLION IN REDEEMABLE COMMON STOCK
CONVERTED TO EQUITY
SunSi Energies, Inc. a specialty chemical provider to the solar industry announced today that the 40% equity shareholder of the Company’s Wendeng trichlorosilane (TCS) facility in Weihai City, China has waived his right of redemption and elected to retain 1,349,628 additional shares of SunSi common stock. The shareholder’s action eliminates the requirement that SunSi raise $2.7 million to redeem the shareholder’s common stock.
Under the terms of the March 18, 2011 Wendeng acquisition agreement, the 40% shareholder was issued 1,349,628 shares of the Company’s redeemable common stock. These shares could have been redeemed by the 40% shareholder beginning September 18, 2011, which would have required SunSi to repurchase these shares for approximately $2.7 million dollars. On June 14, 2011, the shareholder waived his right of redemption and has elected to retain his SunSi shares.
As part of the Wendeng agreement, SunSi was also required to make a payment of $445,075 to the 40% shareholder of Wendeng, no later than June 18, 2011. SunSi made this payment well in advance of the due date, and has now completely fulfilled the financial requirements associated with this acquisition agreement.
David Natan, SunSi’s Chief Executive Officer stated. “We are delighted that our Wendeng partner has chosen to hold his shares and not redeem them. His action sends a tremendous vote of confidence, and now enables us to focus on raising expansion capital to grow the Wendeng facility from its current capacity of 22,000 metric tons to 75,000 metric tons.”
May 11, 2011
GOLDMAN SMALL CAP RESEARCH
INITIATES COVERAGE OF SUNSI ENERGIES (OTC: QB – SSIE)
http://finance.yahoo.com/news/Goldman-Small-Cap-Research-pz2123948517.html?x=0&.v=1
April 19, 2011
SUNSI EMERGES FROM DEVELOPMENT STAGE STATUS AND
RECORDS $4.6 MILLION IN REVENUE
Company Projects Ongoing Profitability and
Provides Fourth Quarter Outlook
Conclusion:
SunSi is the only publicly traded pure play in the TCS market, which is the most important and most profitable raw material in the whole solar food chain. The stock is a bargain and a great entry point.
Top Twelve Reasons to Buy SunSi
- Going to be dominant provider of TCS
- TCS most important raw material in solar
- China-based facilities benefit from China investment plans
- With 47,000 MT capacity, SunSi has 15% of China market
- Wendeng capacity will grow from 22,000 MT t0 75,000 MT
- Wendeng 40% shareholder retained stock; did not redeem
- Company is profitable
- No debt, warrants, or options
- Expected to triple sales and profit from 2011 to 2012
- Chart looks great with help from recent spate of news
- Relatively new, unknown story
- Zacks Investment Research and Goldman Small Cap are fans of the stock; Goldman has $6.00 year-end price target
Sunsi Energies, Inc. (OTC: QB – SSIE – $3.55)
Safe Harbor Statement:
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties including, but not limited to, the impact of competitive products, the ability to meet customer demand, the ability to manage growth, acquisitions of technology, equipment, or human resources, the effect of economic and business conditions, and the ability to attract and retain skilled personnel. The Company is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
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