A Comparative Study Of Chinese And Foreign Solar Photovoltaic Industry Financing

Up to now, China’s photovoltaic industry has been facing a new problem, theindustrial development crisis. Especially, the financing problem is more prominent. Atthe same time, China’s capital market has emerged in recent years. Financialinnovations like GEM have come out rapidly. Therefore it has a morerealistic significance for either the industrial side or the capital side taking as areference that analyzing the financing characteristics of the photovoltaic industry andfiguring out the way of docking between the industry and the capital when combinedwith the new situation of the industry and capital development.Firstly, this article summarizes the overview of all aspects of the foreign PVindustry development and China’s PV industry development. Then this passageanalyzes the current situation of the China PV industry overcapacity. This articlefocuses on summarizing the docking way of the capital and the China’s PV industry inthe development process of China’s photovoltaic industry from a financing point ofview. As foreshadowing, this Paper firstly analyzes the financing characteristicsof the foreign photovoltaic industry. The financing Channel of theforeign photovoltaic industry is relatively more convenient and matureforeign capital market provides different levels of capital support for the developmentof PV industry. The innovative financing instruments give the industry varyingdegrees of support in capital, technology and management.Then, this article comes down to the key point of the study, the financingcharacteristics of the China’s PV industry. From three analytical standards which aredifferent development stages of the industry,the main path of corporate equityfinancing, as well as our launch of the GEM, though three processes which arelooking for the financing situations and cases by decomposition of the industry chain,analyzing the key elements of main enterprises in China’s PV financing overseas, andanalyzing the financing characteristics of PV companies in China before and after the launch of the GEM, this article summed up the financing characteristics of thephotovoltaic industry development. In the early growth of the PV industry in China,the financing is mainly concentrated in the industrial middle chain of the PV modulesand solar cell production through the introduction of venture capital and private equitywith the overseas capital market. In the period of rapid development, China’sphotovoltaic industry financing increased. In the poly silicon industry, capitalfinancing led by the government of state-owned assets be phased out, the gradualintervention of industrial capital. The financing of the silicon material processing andprocessing equipment industry listed both at home and abroad. In the field ofphotovoltaic modules and solar cell technology, the companies are still based on theintroduction of foreign VC/PE to achieve overseas listing and financing. At the sametime the refinancing is part through convertible bonds issued in foreign countries orthe second issuance, but is still dependent on foreign and domestic banks debtfinancing. Subject to benefit from the creation of the GEM, the floodgates ofphotovoltaic enterprises domestic IPO financing are open. Industrial capital with theA-share private placement refinancing or refinancing for the photovoltaic industry hasadded new channels through the reorganization of assets backdoor listing. In2011, PVindustry in China has difficulty in financing. Bank loan project is greatly reduced, butthe domestic IPO financing appears4cases. And the debt financing case in PVsystems integration and application areas appears for the first time. From the path ofthe equity financing of PV companies in China, the main choice of overseas listing ofequity financing, mainly because of comparing with the equity financing conditions inthe Mainland, the foreign capital market financing and refinancing channels is moreconvenient. Before the establishment of the GEM, the domestic photovoltaic industryfinancing is still based on listing aboard by introduction of VC/PE. Domesticindustrial capital investment and financing involved in various ways. After the launchof the GEM, the financing of China’s PV industry obviously showing characteristicsof multi-level and multi-channel which have cases of overseas and domestic,motherboards and GEM, equity finances and innovative debt finance and assetrestructuring backdoor listing. It is noteworthy that the China’s PV industry is still highly dependent on bank loans. Especially when the entire industry is in trouble, thephotovoltaic industry is more dependent on bank loans.Finally, this article summarizes the financing characteristics ofChina’s photovoltaic industry and gives suggestion of dealing with the problems ofthe China’s PV industry’s development and financing, from the view of capital,technology, market and regulates competition.