• First mover advantage leveraging on environmental protection trend and backed by stable recurring revenue.
• Steam plants expansion buoyed by defensive textile industry.
• Further RMB2.3b injection into green investments to cement dominant position; Manufacturing & Services (M&S) segment is group’s backbone.
• Initiate coverage on Sunpower Group with BUY rating.

Green Investments (GI) Offers a Perfect Blend of Growth and Stability

• SUNPOWER GROUP (SGX:5GD)’s new Green Investments (GI) business offers resilience with its large exposure to defensive industries. The segment is also aided by supportive government regulations and a global push for environment protection.
• Green Investments revenue is also recurring in nature, backed by long concessions of around 30 years. As a first mover equipped with proprietary technologies, Sunpower is able to demand prepayments from its customers and generate high flows in Green Investments.

Source: DBS Research - 16 Dec 2019