Aurora Solar Technologies Inc. (TSXV: ACU) appears to be the only game in town when it comes to the hottest product in solar energy
Blake Desaulniers| October 4, 2017 | SmallCapPower:
Aurora Solar Technologies Inc. (TSXV: ACU) provides the class-leading process control system for the fast-growing solar cell production industry—and appears to be the only game in town when it comes to the hottest product in solar—bi-facial technology. Until Aurora Solar Technologies introduced their solution two years ago, the hundred-billion dollar plus market ran with virtually no process controls. Hard to imagine, but true.
Bi-facial solar panels produce 10-30% more electricity than ordinary solar panels by generating a charge from both the top and the bottom surfaces of the panels. Industry leaders are moving aggressively into bi-facial to keep the competitive edge.
Just as notable as a growing order book and pending large orders, Aurora Solar Technologies has been invited by The International Solar Energy Research Centre Konstanz to attend this year’s BiFiPV workshop in Germany.
The International Solar Energy Research Centre Konstanz researches and develops crystalline silicon solar cells. The workshop for 2017 will connect bifacial experts to discuss technology, standardization, qualification, measurements, simulations, and bankability of bi-facial technology.
The fact the Aurora Solar Technologies has been invited speaks volumes. The invitation amounts to a powerful endorsement of ACU’s solutions and puts the Company face to face with Asian, European and international leaders in bi-facial solar.
On The Surface
Over the summer we looked for Aurora Solar Technologies stock to consolidate back into the low-mid $0.20 range after their spectacular run from $0.18 to $0.34 in late spring. But shares rarely traded below $0.25, and on balance volume remained positive over the course of the summer, with shares testing the $0.30 level on big volume buying.
During that time, the Company made three announcements that have contributed to market optimism.
On July 12, Aurora Solar Technologies announced it had received a grant for research into extended applications for its Decima™ Infrared Reflectometry measurement technology. The grant is through the Canadian National Research Council’s Industrial Research Assistance Program (IRAP) and will provide a total of $380,000 over a period of two years.
On August 1, Aurora Solar Technologies announced that it had received an order for two DecimaTM Gemini measurement systems, and VeritasTM process visualization systems, for deployment on new bifacial cell fabrication lines.
In addition to the purchase, the customer has agreed to a joint project with Aurora Solar Technologies to define, document, and publish the economic benefits of Aurora’s bifacial cell measurement and visualization technology.
The systems, ordered by a leading global supplier of production equipment used at several stages in solar cell and semiconductor fabrication, will be used to speed the ramp-up of the new production lines, and assist in solar cell R&D and production equipment development. The systems are scheduled for delivery in September and October.
On September 19, Aurora Solar Technologies announced that it had qualified its Decima™ Gemini inline measurement system for use in the manufacturing of “BiSoN” bifacial photovoltaic cells. The BiSoN cell technology developed at ISC Konstanz has been licensed for volume manufacturing to several major and emerging solar cell manufacturers worldwide. ISC Konstanz and Centrotherm, one of the leading production equipment suppliers, have also partnered in the “BiSoN Alliance” to promote the widespread adoption of BiSoN technology.
As stated in ACU’s release, Dr. Radovan Kopecek, Managing Director, Advanced Cell Concepts at ISC Konstanz, says, “Aurora’s Decima™ measurement system shows a unique capability for measuring the sheet resistance of both the front side and the back side of our BiSoN bifacial wafers. In particular, no other method can accurately isolate the back side sheet resistance from the sheet resistance of the wafer ‘bulk’. This capability is very helpful for monitoring and process control during the fabrication of this part of a bifacial cell. Additionally, the Decima™ performs all of its measurements with high accuracy and repeatability. In summary, we believe that the Decima™ is an essential element to achieve a high level of quality and consistency in the production of bifacial cells.”
Undercurrent
First off, there is talk of a very large order from an industry-leader. That would mean an order of 20 to 40 units to cover 11 lines.
Aurora Solar Technologies had completed and shipped an initial 14 Mono PERC units to this customer by the end of the second quarter of fiscal 2017, meaning Q2 revenues numbers should encourage investors.
An order of seven bifacial units for Linyang have been built and now shipped.
A Decima Gemini systems has also been built for Jinko Solar, the largest solar panel maker in the world and will ship in October for deployment on their first bifacial line. If successful, Jinko plans to convert a number of their existing production lines over to bifacial production meaning more sales for Aurora Solar Technologies.
An additional 40 units may be destined for a separate buyer, with the deal closing as early as Q4 F2017.
It is also anticipated that Aurora Solar Technologies will finalize an order for an initial two Decima™ Gemini measurement systems with a letter of intent for another six units. ACU has asked to use the customer’s name (a Singapore-based industry leader) in news releases.
Aurora Solar Technologies has been at work in India, and anticipates order flow from Adani and into Solar. Canada’s federal government is standing behind ACU in penetrating the Indian market.
In addition, Aurora Solar Technologies has now reached the point of hiring a sales engineer in Singapore. Things are simply too hot in China to manage from an overseas base.
In addition, Aurora Solar Technologies just brought on a very well respected physicist PhD who speaks fluent Mandarin. This is a product development position to help develop new products to enhance the Company’s value proposition and boost revenue on every line.
Flow
So, accounting for orders signed, sealed, and/or delivered, ACU’s cash flow for F2017 (ending in March 2018) will very likely push the Company above break even of $4.1 million for the first time.
An optimistic forecast would put Aurora Solar Technologies into the $5.0 million to $7.0 million revenue range, which would yield profits ranging between $0.0173 and $0.055 per share based on ACU’s current structure. Given a normal growth earnings per share multiple of 30X, the potential share price upside could be as high as $1.65 on this year’s performance.
Once again, a reminder that Due Diligence on Aurora could turn out to be time and effort well invested.
[Editor’s Thoughts: Aurora Solar Technologies’ stock price is enjoying good upward momentum currently, nearly doubling since the start of 2017. Look for contract announcements to provide further catalysts for its shares. The current lower for longer oil-price environment, however, has been known to dampen investor interest in the cleantech sector, as businesses and consumers have little motivation to choose a greener power source that is seen as more expensive. That being said, government subsidies have been a lifeblood for the space in the past as voters have a soft spot for the environment. Aurora Solar Technologies and its bi-facial R&D appears to have great potential, and investors should be on the lookout for signs of widespread industry adoption.]
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