GreatCell Solar And The Gamble On Perovskite Solar Cells
Current Price: 0,146$
Capital Investment: Not Invested - No Trade Open
My friend Michael invested into GreatCell Solar in hopes that shareholders will take great profits when all the R & D on Perovskite solar cells finally results in products produced and revenues for the company. GreatCell Solar recently rebranded themselves from Dyesol to GreatCell causing a lot of confusion on the stock exchanges because they also changed their ticker abbrevation for the stock. Currently GreatCell Solar (former Dyesol) burns cash by developing new 3rd generation solar cells with the new perovskite technology. GreatCell Solar is a small cap company and I analysed it mainly because I was interested in my friends investment.
Perovskite Solar Cells
If you are interested in Perovskite solar cells and how these cells could revolutionize the market you can check out the following two articles:
https://www.huffingtonpost.com/clayton-b-cornell/perovskite-solar-cell-key_b_11069628.html
https://www.perovskite-info.com/perovskite-solar
There is a second company as an Oxford University spin of called Oxford PV in the USA. Their vision is to sell licenses on their Perovskite solar cell technology that is currently in development. With these licenses skyscrapers windows could be applied with their surface which would change a skyscraper into a power plant. As a result a skyscraper would produce 60% of its power consumption on its own with the new window surface. Perovskite solar cells are also expected to be much cheaper to produce than the current solar cell technology.
Price To Book Value
The following web page gives you a great overview:
http://financials.morningstar.com/competitors/industry-peer.action?t=DYSOF®ion=usa&culture=en-US
To me GreatCell Solar Ltd. seems to be too expensive and there is a lot of risk involved. Definitly not what I am searching for as a value investor.
Cooperation With JinkoSolar
Recently GreatCell Solar decided to cooperate with JinkoSolar to develop and produce these new solar cells. You can also find JinkoSolar in the upper picture and Jinko Solar has a market cap of 765 Million compared to 56 Million of GreatCell. In my investment history I once invested with a huge stake into Nokia when they had their crises and stock prices were low because I beleaved in a turn around when they finally sell their new smartphones. Nokia missed the market change from normal handys to smartphones and their sales plummeted as well as their stock price. Within the crisis they decided to partnership with Microsoft to develop Windows Phone smartphones. I thought that was a good idea back then because they could differentiate from the rest of the market and Windows Phones looked nice to me. Besides the fact that Windows Phone never became popular enough to penetrate the market I sold my shares of Nokia when Microsoft bought Nokia's phone production and integrated it into Microsoft because Nokia basically had no business in phones any more. However I bought most of my shares at a stock price so low that I was glad to get basically my money back but there was no profit after all from this trade. Now think of this for a moment because Nokia was in no way a small company but still was taken over by another company because the Management decided to do so. Shareholders could just watch whats going on and the opportunity of a turnaround was suddenly gone. Nokia Shares still exist today because Microsoft was not interested in Nokia's other communications businesses and bought just the smartphone segment. Now take a look on the market cap of GreatCell Solar (56 Million) and JinkoSolar (765 Million). JinkoSolar could easily add pressure on GreatCell Solar when the Technology is finally ready to produce and buy the complete company for 7,3% of their market cap. They offer a premium on the stock price and suddenly the company GreatCell Solar does not exist any longer but is part of JinkoSolar. Another risk is that JinkoSolar is a chinese company and in China patent laws cannot be executed. In University we learned strategies to avoid such risks. One strategy of a company called Blum in Austria is to sell and produce the old version / generation of their products in China because then the chinese competitors that copy their products and even their brand / name cannot sell the old products in Europe. I don't know how GreatCell Solar plans to cover those risks but with such a technology investment I would not choose a chinese partner but search for a Partner in Europe or the USA. I first thought I could easily allocate a small capital amount for the speculation on this company but with the experience I had with Nokia even 500 - 1000 USD would be too much risk from my perspective.
You can read more about the cooperation with JinkoSolar at:
http://www.proactiveinvestors.com.au/companies/news/181101/greatcell-solar-and-jinkosolar-to-work-on-third-generation-photovoltaic-technology-181101.html
Conclusion
Capital Investment: Not Invested - No Trade Open
My friend Michael invested into GreatCell Solar in hopes that shareholders will take great profits when all the R & D on Perovskite solar cells finally results in products produced and revenues for the company. GreatCell Solar recently rebranded themselves from Dyesol to GreatCell causing a lot of confusion on the stock exchanges because they also changed their ticker abbrevation for the stock. Currently GreatCell Solar (former Dyesol) burns cash by developing new 3rd generation solar cells with the new perovskite technology. GreatCell Solar is a small cap company and I analysed it mainly because I was interested in my friends investment.
Perovskite Solar Cells
If you are interested in Perovskite solar cells and how these cells could revolutionize the market you can check out the following two articles:
https://www.huffingtonpost.com/clayton-b-cornell/perovskite-solar-cell-key_b_11069628.html
https://www.perovskite-info.com/perovskite-solar
There is a second company as an Oxford University spin of called Oxford PV in the USA. Their vision is to sell licenses on their Perovskite solar cell technology that is currently in development. With these licenses skyscrapers windows could be applied with their surface which would change a skyscraper into a power plant. As a result a skyscraper would produce 60% of its power consumption on its own with the new window surface. Perovskite solar cells are also expected to be much cheaper to produce than the current solar cell technology.
Price To Book Value
The main value of GreatCell Solar is their R & D results and patents for their technology as the 3rd generation solar cells could revolutionize the market. The P/B value changes from 2,8 to 1000 and above depending on the day you analyse the company. However I researched a nice overview of the market with a price / book value of 57,9 for GreatCellSolar. An investor of GreatCell Solar clearly does not invest into book value but rather into technology and patents as well as the employees in R & D.
http://financials.morningstar.com/competitors/industry-peer.action?t=DYSOF®ion=usa&culture=en-US
To me GreatCell Solar Ltd. seems to be too expensive and there is a lot of risk involved. Definitly not what I am searching for as a value investor.
Cooperation With JinkoSolar
Recently GreatCell Solar decided to cooperate with JinkoSolar to develop and produce these new solar cells. You can also find JinkoSolar in the upper picture and Jinko Solar has a market cap of 765 Million compared to 56 Million of GreatCell. In my investment history I once invested with a huge stake into Nokia when they had their crises and stock prices were low because I beleaved in a turn around when they finally sell their new smartphones. Nokia missed the market change from normal handys to smartphones and their sales plummeted as well as their stock price. Within the crisis they decided to partnership with Microsoft to develop Windows Phone smartphones. I thought that was a good idea back then because they could differentiate from the rest of the market and Windows Phones looked nice to me. Besides the fact that Windows Phone never became popular enough to penetrate the market I sold my shares of Nokia when Microsoft bought Nokia's phone production and integrated it into Microsoft because Nokia basically had no business in phones any more. However I bought most of my shares at a stock price so low that I was glad to get basically my money back but there was no profit after all from this trade. Now think of this for a moment because Nokia was in no way a small company but still was taken over by another company because the Management decided to do so. Shareholders could just watch whats going on and the opportunity of a turnaround was suddenly gone. Nokia Shares still exist today because Microsoft was not interested in Nokia's other communications businesses and bought just the smartphone segment. Now take a look on the market cap of GreatCell Solar (56 Million) and JinkoSolar (765 Million). JinkoSolar could easily add pressure on GreatCell Solar when the Technology is finally ready to produce and buy the complete company for 7,3% of their market cap. They offer a premium on the stock price and suddenly the company GreatCell Solar does not exist any longer but is part of JinkoSolar. Another risk is that JinkoSolar is a chinese company and in China patent laws cannot be executed. In University we learned strategies to avoid such risks. One strategy of a company called Blum in Austria is to sell and produce the old version / generation of their products in China because then the chinese competitors that copy their products and even their brand / name cannot sell the old products in Europe. I don't know how GreatCell Solar plans to cover those risks but with such a technology investment I would not choose a chinese partner but search for a Partner in Europe or the USA. I first thought I could easily allocate a small capital amount for the speculation on this company but with the experience I had with Nokia even 500 - 1000 USD would be too much risk from my perspective.
You can read more about the cooperation with JinkoSolar at:
http://www.proactiveinvestors.com.au/companies/news/181101/greatcell-solar-and-jinkosolar-to-work-on-third-generation-photovoltaic-technology-181101.html
Conclusion
Perovskite solar cells are an interesting new technology that is currently under development and researched by a small number of companies like GreatCell Solar or Oxford PV. I analysed GreatCell Solar because a very good friend of mine is invested in this company. This stock falls under the category of speculation and not investment for a number of reasons (read through my Introduction - The Big Picture if you do not understand the difference of speculation and investment). They do not produce or sell their products so they basically burn cash at the moment with R & D. Their stock price is too high from a price to book ratio perspective and I fear that they will issue even more shares to raise capital for their R & D and finally production, marketing and sales. That would all be ok to me to speculate with a small amount of money but the biggest risk from my point of view is the cooperation with a chinese big - cap company. Maybe I am too cautious but I had negative experiences from my investment in Nokia as I explained already. Therefore I will not be invested in GreatCell Solar.
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