Company Overview: ClearVue Technologies Ltd. is focused on development of specialty glass coating. The Company’s technology ClearVue PV is at its simplest energy efficient, clear glass windows which generate electricity and reduce energy consumption. Its technology allows visible light to pass through a pane of glass, while the invisible wavelengths of light are deflected to the edges of the glass where they are converted into electricity. Its technology also transforms a glass building into a solar panel, generating power where it is needed to reduce power transmission requirements. The Company provides energy-efficient glazing for commercial buildings, housing, greenhouses and automobiles, Internet of Things applications and mobile device screens.
 

CPV Details

Decent Growth in Revenue: ClearVue Technologies Limited (ASX: CPV) is an Australian technology company that operates in the Building Integrated Photovoltaic (BPIV) sector, which involves the integration of solar technology into the glass and building surfaces. As on 22 November 2019, the market capitalisation of the company stood at ~$15.56 million. Annual General Meeting of the company is to be held on 29 November 2019. The company has successfully moved forward on numerous fronts, for instance, technical, commercial, Intellectual Property (IP) and corporate and financial aspects to its business, all being required for the successful market entry of its world leading advanced solar PV windows and glazing. The company’s key target markets include Agriculture and Horticulture, Commercial and Residential and Public Amenities. The company stated that it has signed Memorandum of Understanding (MOU) with various companies, for instance, Glass Partners Holdings Pty Ltd, Global Smart Cities Pty Ltd, Grafsol General Trading LLC for further development and distribution and has continued to expand in Australia, Europe, Middle East and Africa. Notably, ClearVue Technologies Limited has signed a Distribution Licence Agreement with Grafsol General Trading LLC in UAE. The company now has 85 granted patents, with 40 patents pending in different countries around the world and, resultantly, the company’s IP and technology development portfolio has been expanding, which provides a base for growth in the long-term. It has released its financial results for the year ended 30 June 2019, wherein it experienced growth in revenue to $1.6 million from $0.75 million in FY18. The operating loss of the Group for the financial year after providing for income tax amounted to $3,852,963 as compared to the loss of $ $3,685,830 in FY18.

As of 30 June 2019, intangible assets of the company rose from $1.4 million to $1.8 million. The company also witnessed a rise in trade and other receivables to $623,426 from $18,797 in FY18. This implies that the company’s cash level might go up in the coming future and may help it in achieving decent levels of growth. Also, there is a possibility that the company can gain influence amongst the different competitors in the market. During the year, expenses of the company went up to $5.46 million from $4.43 million. This was mainly due to increased expenses for employees, higher material costs, rise in consulting expenses and soaring travel expenses, offset by a decline in finance costs, project costs and share-based payments expense. It looks like the increase in expenses is mainly attributable to a significant increase in scale to the operations. The company also portrayed a healthy balance sheet with no debt. Hence, they have a negligible exposure on interest rate risks as they are insulated from a rise in borrowing costs.

ClearVue Technologies Limited expects a large market opportunity as there are no high energy, architecturally acceptable transparent colourless products except ClearVue. It also anticipates opportunities in mini-homes, and in 2H20, first orders are expected from licensee Grafsol in the U.A.E. Moreover, stable balance sheet, decent liquidity levels, deployments towards R&D programs, and inking of OEM Supply Agreement with BeyondPV are expected to help in the overall growth of the company. 


Financial Performance (Source: Company Reports)

Top 10 Shareholders: The following table provides a broader overview of the top 10 shareholders in ClearVue Technologies Limited:


Top 10 Shareholders (Source: Thomson Reuters)

Decent Liquidity Levels Places CPV to Pursue Growth Opportunities: In FY19, current ratio of the company stands at 2.96x, higher than the industry median of 1.40x. This indicates that the company has a decent liquidity and capable of paying its current liabilities using current assets. Also, decent footing from the liquidity standpoint provides headroom for deployments towards strategic growth objectives which can act as long-term growth catalysts.

Since the company has no debt, Debt/Equity ratio of the company during the year is zero, implying that CPV’s business is financially stable. Therefore, it can be said that the company can focus on its long-term growth objectives and can make deployments to increase its market presence, which can act as a primary tailwind for targeted growth.


Key Metrics (Source: Thomson Reuters)

Business and Revenue Model: The company derives its revenue from direct sales, where it initially sells and supplies fully assembled IGU/window products directly to its distributors and licensed channel partners across Australia and worldwide. CPV also earns its revenue from the sale of its components to manufacturing licensees, including its proprietary nano and micro particle doped activated interlayer and its proprietary mini solar photovoltaic strips for use inside of each integrated glazing unit. The license fees charged to manufacturers and/or distributors for the right to manufacture and/or distribute and sell ClearVue products. Additionally, the company intends to charge a flat USD royalty fee per sqm of its glass/technology, which is sold by the manufacturer or distributor business. It would be offering upsell opportunities to the licensees, including sale of the data and access to the information for which it would be receiving a commission/percentage. Therefore, there are expectations that the company’s diversified sources of revenues might help it in achieving respectable growth rates moving forward and can also improve its position to tap the growth opportunities.

OEM Supply Agreement with BeyondPV: The company has recently announced that it has formally signed an OEM Supply Agreement with BeyondPV of Taiwan (Republic of China). Under this agreement, BeyondPV will invest US$3.5 million and will design, manufacture and supply solar PV strip modules for use in CPV’s solar PV IGU’s, windows and smart façades. It needs to be noted that BeyondPV would be supplying to ClearVue and to its licensed manufacturers.

BeyondPV will provide ongoing R&D activities for continuous improvement of the CPV product and technology during the OEM supply term. Both the companies will work to maximize the solar strip shipments for CPV and its licensees project developments. Target of the solar module strip shipment volumes in 2020 is to be over 200,000 strips.

ClearVue Signs Collaboration Opportunity: ClearVue Technologies Ltd has signed a collaboration agreement with Roots Sustainable Agricultural Technologies Limited to explore complementary sales opportunities within the growing greenhouse sector, including the construction of a world-first demonstration greenhouse in Israel. Under an agreement, both parties would jointly be pursuing sales opportunities with new and existing clients and would also be leveraging each other’s industry-leading technologies in order to offer the unique combined offering within the greenhouse market. Also, both the companies aim to build a demonstration greenhouse utilising CPV’s energy generating PV solar glazing glass panels to explore powering Roots’ Root Zone Temperature Optimisation (RZTO) and Irrigation by Condensation (IBC) technologies. Australian Federal Government granted CPV $1.6 million to build a grid-independent greenhouse commencing 2019.

What to Expect from CPV Moving Forward: The company in its upcoming future is targeting to incorporate its technology into a commercial building and complete and achieve IEC and UL accreditations by Q4 2019 calendar year. It is on track for early sales commencing in the latter half of 2019, early 2020. The company also anticipates higher demand for BIPV and expects large market opportunities as there will be more than 29 mega cities with over 10 million people by 2025. The company has been targeting the completion of various demonstration projects and plans to continue the R&D as well as product development work, including working with Arup on the Smart Façade modules. CPV’s target market represents in excess of 2.1 billion sqm² of glass per annum with a total market size of above 5.5 billion sqm of glass per annum. Post year-end, the company announced an underwritten Share Purchase Plan (SPP) to raise A$2 million before costs and a proposed placement targeted to raise up to an additional A$2 million.

The company’s plan is based around a licensing model where royalty and nano/micro particle doped interlayer and photovoltaic strips are sold to the company’s manufacturing licensees at approximately USD $245 per sqm. It also intends to increase its panel size greater than 2.3m x 1.2m, nearly double the previous size. In the second half of 2020, the company expects its first order from Grafsol in the U.A.E, Asia Pacific, US Licensee and South African / European Licensees. As of 30 June 2019, ClearVue Technologies Limited had a cash balance of approximately $1.4 million and stated that it has received an R&D tax refund of AUD $602,353 from the Australian Tax Office. The company aims to achieve certifications necessary for global sales, which includes Underwriters Laboratories (or UL) for North America and the International Electrotechnical Commission (or IEC) for Europe & U.A.E.


Key Valuation Metrics (Source: Thomson Reuters)

Stock Recommendation: The stock price fell by 31.71% in the past 6 months. Currently, the stock is trading towards its 52-week low of $0.110, proffering an opportunity for share accumulation. In the past, the company has made substantial deployments into the ongoing R&D programs in order to ensure that its technology and products continue to lead in building-integrated-photovoltaics as well as smart façades for smart cities market which is rapidly growing.

Also, the company has decent liquidity levels, which might help in making deployments towards key strategic objectives. The company has signed agreements and MoU with various other companies and, hence, is expected to derive growth and synergies. The additional funding from the Share Purchase Plan will better off the company’s balance sheet and might make the company strong enough to survive the economic downturn and thrive when the going gets good again. Considering the trading levels, stability in the balance sheet, and decent growth in revenue along with modest outlook, deployments towards ongoing R&D programs, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.140.


CPV Daily Technical Chart (Source: Thomson Reuters)

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