Meet China's Clean Energy Wildcatters Who Are $9 Billion Richer By Bloomberg
A new class of clean energy entrepreneurs is emerging in China and creating fabulous wealth -- $9.13 billion this year alone. Call them the wildcatters of the solar age.
To some extent, they're riding the froth of Chinese equity markets. The Shanghai Stock Exchange Composite Index is up about 40 percent since Jan. 1, compared with an increase of about 3 percent for the Standard & Poor's 500 Index.
But they're also being enriched by a fundamental shift in China's energy policies. China was the world's biggest investor in renewable energy last year at $89.5 billion, followed by the U.S. with $51.8 billion, according to a report from Bloomberg New Energy Finance published in January.
"It's an important moment in time," said Jenny Chase, lead solar analyst for BNEF. "It's an inflection point. It is the point where China stops being just an exporter and becomes a truly domestic market."
China's leaders have outsized ambitions for clean energy in the world's most-populous nation. In November, the U.S. and China reached a historic agreement to curb greenhouse gases and invest in new clean-energy developments.
For 2015, the nation plans to add about 18 gigawatts of solar power capacity, an amount almost equal to all the generating capacity available in the U.S. at the end of 2014.
Globally, cheaper solar panels will lead to $3.7 trillion of investment in the next 25 years, according to the New Energy Outlook 2015, a report published by London-based BNEF Tuesday.
Year-to-date, the 10-best performing stocks on the NYSE Bloomberg Global Solar Energy Index are Chinese, led by Jiangsu Zongyi Co., a developer of solar power plants in Jiangsu province. From the last day of trading in December to the close on June 15, Jiangsu Zongyi's shares have surged 235 percent.
"The stocks have risen because the fundamentals of the photovoltaic industry are good," said Gong Siwen, a Shanghai-based analyst from Northeast Securities Co. "Their valuations are quite fair and there's little sign of a bubble in the stocks."
Though far from typical because of questions about sales between the parent and the Hong Kong-listed unit, Li Hejun, chairman of Hanergy Thin Film Power Group Ltd., is one of the highest-profile to benefit. Despite Hanergy's 47 percent plunge on May 20, Li sits on almost $4.5 billion in gains since the beginning of the year.
Or how about Ao Xiaoqiang, the largest shareholder in Beijing SDL Technology Co. Ao's 385 million shares in Beijing SDL had increased by 9.89 billion yuan in value to June 15. Ao's 64 percent stake is now worth 14.72 billion yuan.
Shared characteristics run through many of this new class. Typically in their late 40s to early 50s, they're often the owners or largest shareholders of their respective companies. Most are university educated with degrees in material sciences or engineering. Almost all are virtually unheard of outside China.
"We're getting close to the point where renewables don't need subsidies and governments will be writing solar into their resource planning and documentation," BNEF's Chase said. "China is going to be a massive market for clean energy technologies. While there's a boom in valuation, the companies involved will be part of that story."
The following is a list of individuals at some of China's best-performing solar and environmental companies that have seen their wealth increase this year:
1.) Li Hejun, 47, largest shareholder in Hong Kong-listed Hanergy Thin Film Power Group Ltd. Hanergy is a maker of thin-film solar products and produces equipment for Beijing-based parent Hanergy Holding Group Ltd. Li's 73 percent stake in Hanergy Thin Film increased in value by about HK$33.7 billion ($4.35 billion) since the beginning of the year until May 20 when they were suspended from trading. Li's Hanergy Group is based in Beijing. Value of shares held: HK$119.6 billion ($15.4 billion).
2.) Ao Xiaoqiang, 51, largest shareholder in Beijing SDL Technology Co. Beijing SDL develops analytical instruments and environmental monitoring systems. Ao holds a 64 percent stake in Beijing SDL. Stake has increased by 9.89 billion yuan ($1.59 billion). Ao graduated from the South China University of Technology in 1985. Value of shares held: 14.72 billion yuan ($2.37 billion).
3.) Cao Renxian, 47, biggest shareholder in Sungrow Power Supply Co. The company develops, produces and sells inverters to convert power from solar and wind projects for use by utilities. Sungrow shares have more than doubled this year. Cao's 38 percent stake in Sungrow Power, or 251 million shares, have increased by 6.10 billion yuan ($982 million) in value. Value of shares held: 10.16 billion yuan ($1.63 billion).
4.) Zan Shengda, 52, second-largest shareholder in Jiangsu Zongyi Co., a maker of solar cells and developer of solar power plants. Zan's stake has increased by 4.71 billion yuan ($759 million) so far this year. Zongyi, based in the eastern city of Nantong, also produces semiconductors and superconductor materials used in information technology. The company added businesses related to Internet lotteries, mobile games and investing last year. Zongyi has surged more than 200 percent since the beginning of the year. Value of shares held: 6.71 billion yuan ($1.08 billion).
5.) Li Zhenguo, 47, owns 18 percent of Xi'an Longi Silicon Materials Co., which develops, manufactures and sells silicon rods and silicon wafers. Li graduated with a major in the study of semiconductor materials from Lanzhou University's physics department. The company is based in the northwestern city of Xi'an and also produces semiconducting materials, solar-grade silicon and develops solar power projects. Xi'an Longi's shares have jumped 184 percent in the period in Shanghai. Li's 296 million shares have increased in value this year by 3.77 billion yuan ($607 million). Value of shares held: 5.83 billion yuan ($939 million).
6.) Guo Mao, 44, owns a 53 percent stake in Chongqing Zaisheng Technology Corp., which has increased in value by 1.28 billion yuan ($206 million) since the company's shares began trading publicly. Chongqing Zaisheng, which makes glass microfibers used in filters to clean air, began trading in Shanghai on Jan. 22. Chongqing Zaisheng's shares have surged more than 700 percent since their opening. Value of shares held: 1.43 billion yuan ($230 million).
7.) Han Pingyuan, 51, biggest shareholder in Avic Sanxin Co., a maker of glass and curtain wall engineering services. Avic Sanxin is based in the southern city of Shenzhen and the company's glass is used in solar panels. Avic Sanxin's 189 percent gain has added 1.47 billion yuan ($237 million) to Han's wealth. Value of shares held: 2.25 billion ($362 million)
8.) Wu Jianlong, 48, biggest shareholder in Zhejiang Sunflower Light Energy Science & Technology Ltd. The company, based in the eastern province of Zhejiang, develops solar products including crystalline silicon photovoltaic solar cells. Wu's 16 percent stake in Zhejiang Sunflower Light has increased by 1.22 billion yuan ($197 million) since Jan. 1. Value of all shares held: 2 billion yuan ($322 million)
9.) Wang Yuelin, 50, largest shareholder in Chengdu Guibao Science & Technology Co. Produces silicon construction and industrial sealants. Chengdu Guibao's sealants are used to bond solar modules. Wang's 19 percent stake has increased by 452 million yuan ($73 million) since Jan. 1. Value of shares held: 699 million yuan ($113 million).
10.) Pan Jianqing, 52, chairman and second-biggest shareholder of TDG Holdings Co. a maker of electromagnetic cores and materials. According to TDG Holdings's annual report, the company pulled out of solar production last year, but still produces sapphire crystal materials used in LED lighting and is a developer of distributed solar power projects. Pan's 47.8 million shares in TDG Holdings and the company's 185 percent gain have made the chairman 819 million yuan ($132 million) richer. Value of shares held: 1.26 billion yuan ($203 million)
*Valuations are based on closing share prices as of June 15, 2015, and are calculated on the assumption holdings are unchanged since Dec. 31, 2014. In the case of a public offering, the value is calculated from the opening price on the first day of trade. All companies were contacted through e-mail or by telephone to confirm shareholdings. Where no comment was received, regulatory filings and Bloomberg data have been used. The value of Li Hejun's holding in Hanergy Thin Film is based on the last quoted price before the shares were suspended. They remain halted until the company issues a statement clarifying the reason for the requested suspension; it isn't known when they can begin trading again.
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