20230310-招银国际-知行集团控股-01539.HK-A_diversified_new_energy_play_4页_603kb

Unity Group (1539 HK) Summary

Core Content

Unity Group (1539 HK) is a diversified new energy company based in Hong Kong, established in 2008 and listed on the Hong Kong Exchange (HKEX) in 2016. It provides integrated energy saving and management solutions through four major business lines: (1) lighting & cooling systems, (2) renewable energy, (3) Vanadium redox flow battery (VFB), and (4) green property. The company primarily operates under the Energy Management Contract (EMC) business model.

Main Business Segments

1. Lighting & Cooling Systems

• Unity specializes in energy-efficient LED lighting devices and systems.
• In March 2022, it undertook a large-scale energy-saving project for the Malaysian state government, aiming to install 6 million units of LED lights.
• As of September 30, 2022, 10,000 units had been installed, with plans to extend the project to other five regions of Malaysia, targeting an additional 10 million units (total pipeline: 16 million units).

2. Renewable Energy

• Unity offers one-stop PV power generation solutions, including rooftop systems and solar farms in Hong Kong, Mainland China, Malaysia, and Africa.
• In December 2022, it formed a strategic partnership with a subsidiary of PowerChina (601669 CH) to co-develop renewable energy projects in Mainland China.
• The total project pipeline capacity is estimated to reach ~2.6GW, with an estimated contract value of RMB5.7 billion for survey, design, equipment procurement, and construction services.

3. Vanadium Redox Flow Battery (VFB)

• VFB is a type of energy storage technology that uses vanadium ions in different oxidation states for energy storage and generation.
• Unity entered the VFB industry in 2018 by acquiring 23.6% equity interest in InVinity Energy Group, which operates a vanadium mine in Hunan Province with 34,468 tons of high-grade vanadium pentoxide (V₂O₅) in reserve.
• InVinity Energy Group also has a processing plant with an annual production capacity of 3,000 tons of V₂O₅, a key component in VFBs.
• The VFB market is expected to grow rapidly, with Guidehouse Insights projecting global annual VFB installation to reach 32.8GWh in 2031E (41% CAGR), and China's market size to reach RMB40.5 billion by 2030E.

4. Green Property

• In May 2022, Unity expanded into the green property sector, offering solutions such as green building materials, green facades, solar energy devices, and rainwater recycling systems.
• It acquired a property in Kwai Chung (total area: 3,000 sq.m.) planned to be redeveloped into a green digital data center to support its green property initiatives.

Carbon Credits

• Since early 2022, Unity has been granted carbon credits through various energy-saving projects.
• By the end of July 2022, it had obtained 50k tons of carbon credits, representing ~7% of its total greenhouse gas (GHG) emissions inventory.

Financial Overview

Share Performance

• Current Price: HK$0.146

• Market Cap: HK$348 million

• Avg 3 mths t/o: HK$0.60 million

• 52w High/Low: HK$0.68 / HK$0.11

• Total Issued Shares: 2,385.67 million

• Shareholding Structure:

  • Wong Man Fai: 53.05%
  • Others: 46.95%

• Share Performance (12 months):

  • 1-mth: 33.3% (Absolute) / 41.5% (Relative)
  • 3-mth: -14.9% (Absolute) / -17.5% (Relative)
  • 6-mth: -73.1% (Absolute) / -74.7% (Relative)

CMB International Global Markets Limited (CMBIGM)

• CMBIGM is a subsidiary of CMB International Capital Corporation Limited, which is a subsidiary of China Merchants Bank.
• It provides equity research and market analysis, with a rating system including BUY, HOLD, and SELL for stocks, and OUTPERFORM, MARKET-PERFORM, and UNDERPERFORM for industries.

Important Disclosures

• The information in this report is not tailored to individual investors and is based on publicly available data.
• CMBIGM does not guarantee the accuracy or completeness of the information.
• The report is not an offer or solicitation to buy or sell any securities and may not be distributed to persons outside the defined categories.
• There are potential conflicts of interest due to CMBIGM's market-making activities and relationships with the companies mentioned.