This is Day 2 of Winner’s Week in which we highlight five clean energy/tech companies whose share priceperformances significantly outperformed the overall markets and theirclean peers during the first half of 2010 and the year from July 1,2009.
The spotlight today shines on Hoku Corporation (NASDAQ: HOKU), formerly Hoku Scientific, Inc. Honolulu based, Hokuis a diversified clean energy technologies company with three businessunits: Hoku Materials, Hoku Solar and Hoku Fuel Cells.
Hoku shares traded up 21.5 percent during the first half of2010 and up 37 percent for the full year from July 1, 2009.
Meanwhile the overall U.S. equity indices performed asfollows:
S&P 500: -7.57 percent, +12.16 percent
DJIA: -6.27 percent, +15.83 percent
NASDAQ: -7.05 percent, +14.74 percent
Over these same periods, the clean energy/tech sector dramatically underperformed theoverall indices. For example, the leading solar ETF (Claymore/MAC GlobalSolar Index (ETF) (NYSE: TAN)) was down 37 percent for the first half of 2010 and down 32 percent forthe for the full year.
Hoku is a small development-stage company getting a foothold in photovolatic systems and with big plans to manufacturer polysilicon and fuel cell systems.
Hoku’s revenues for the fiscal year ended March 31, 2010 were$2.6 million, compared with $5 million for fiscal 2009. All revenue infiscal 2010 and 2009 was derived from photovoltaic system installationsand related services, the sale of electricity, and the resale of solarinventory.
During fiscal 2010, Hoku lost $5.4 million ($4.6 millionnon-GAAP), compared to fiscal 2009‘s loss of $3 million ($1.7 millionnon-GAAP).
The company reported that although year-end revenue was lowerin fiscal 2010 than in fiscal 2009, it installed nearly twice as much PV in 2010.
Hoku explained the revenue differences are primarily due tothe ownership structure of the nearly one-megawatt project completedearlier in fiscal 2010 for the State of Hawaii Department ofTransportation. Because these systems were financed and constructedunder a series of power purchase agreements, and because Hoku Solar is a co-owner of the systems, the company was unable to recognize revenuefrom the sale of these projects. However, because Hoku has a long-termownership interest in these projects, its expects to derive revenue from the sale of electricity to the State of Hawaii during the 20-year termof the power purchase agreements.
Revenue is unlikely to come from Hoku’s other two subsidiarycompanies for some time:
Hoku Materials plans to manufacture, market, and sellpolysilicon for the solar market from its plant under development inPocatello, Idaho.
Hoku Fuel Cells has developed fuel cell membranes and membrane electrode assemblies for stationary and automotive proton exchangemembrane fuel cells.
One of Hoku’s competitive advantages is the financial strengthcontributed by 60 per cent owner Tianwei New Energy Holdings Co.Ltd. of Chengdu, China. Tianwei New Energy has total combined assets of approximately 2.7 billion Yuan ($400 million) and is asubsidiary of Baoding Tianwei GroupCo., one of the largest and most influential companies inChina.
Hoku reported June 30 that had entered into a $28.3 million credit agreement with the New York branch of China Construction Bank.The proceeds will be used toward completion of the of the polysiliconproduction plant under construction by Hoku Materials in Pocatello.
Hoku has 90 days to borrow all $28.3 million that is availableunder the credit agreement and must repay all borrowed amounts on June14, 2012. Loans under the credit agreement will be secured by a standbyletter of credit drawn by Tianwei New Energy Holdings Co., Ltd. issuedto the China Construction Bank as collateral.
In May 2010, Hoku received $20 million in similar debtfinancing from China Merchants Bank.
DISCLOSURE: The writer has no positions in, or professionalconnections with, these companies.