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

High Scalable Business Model with Strong Balance Sheet: ClearVue Technologies Limited (ASX: CPV) is an Australian technology company that operates in Building Integrated Photovoltaic (BPIV) sector that involves the integration of solar technology into glass and building surfaces. The company’s products can be used to achieve significant energy cost savings, to prevent unwanted UV and Infrared radiation from entering a building, and then converting the unwanted radiation into electricity. As on 31 January 2020, the market capitalisation of the company stood at $17.78 million. During FY19, revenue of the company went up to $1.60 million from $0.75 million in FY18; and the company moved ahead on multiple fronts including the technical, commercial, Intellectual Property (IP) and corporate and financial aspects. This helped the company in the successful market entry. In the recently held Annual General Meeting, management stated that it had been granted $1.6 million from the Australian Federal Government to build a grid independent greenhouse. Revenue strategy of CPV is centered on a licensing model wherein (1) royalty, (2) nano/micro particle doped interlayer and (3) photovoltaic strips are sold to its manufacturing licensees at ~USD$245 per sqm. The company has a highly scalable business model with low capital intensive manufacturing. The multiple global licensed manufacturing partners presents large opportunities for the company to scale rapidly. During FY19, trade receivables of the company witnessed a substantial increase and stood at $0.62 million, up from $0.018 million in FY18. The company also reported a strong balance sheet with no debt as on November 2019.

ClearVue Technologies Limited has also expanded its sales opportunities by producing a panel size which is almost double the previous panel size. These larger panel sizes are essential for aesthetic purposes and ensure architectural buy-in. In addition, Board has also emphasised on signing a consultancy agreement with façade engineers, Arup Australia Pty Ltd and the other world-leading firm of planners, designers, consultants and engineers. The company is using an aggressive growth strategy and is focusing on global growth through strategic licensing of manufacturers and distributors in multiple global territories. The company expects opportunities in mini homes and is also developing several new products to expand the company’s product offering, which will drive future growth.


FY19 Financial Performance (Source: Company Reports)

Top 10 Shareholders: The following table provides an overview of the top 10 shareholders of ClearVue Technologies Limited. Rosenberg (Victor) is the largest shareholder in the company, with a percentage holding of 31.07%.


Top 10 Shareholders (Source: Thomson Reuters)

Decent Liquidity Levels and Stable Balance Sheet: During FY19, Return of Equity witnessed an improvement over the past year, indicating that the company has increased its efficiency and has increased its ability to generate profits without needing much capital. Current ratio of the company stood at 2.96x, higher than the industry median of 1.40x. This indicates that the company is liquid enough to pay off its current liabilities using its current assets. The company also reported a strong balance sheet with a Debt/Equity ratio of ‘Zero’, lower than the industry median of 0.19x. This indicates that the company is secured from high borrowing costs and risks of increasing interest rates.


Key Metrics (Source: Thomson Reuters)

Business and Revenue Model: ClearVue Technologies Limited derives its revenue from Direct and component sales, Royalty payments, Licence fees and upsell opportunities. The company will primarily sell and supply fully assembled IGU or window products directly to distributors and licensed channel partners in Australia and other parts of the world. It will also derive its revenue from selling technology/product components to its manufacturing licensees, including its proprietary nano and microparticle doped activated interlayer. CPV intends to charge a flat USD royalty fee per sqm of ClearVue glass/technology and in some cases charge a fee to manufacturers and/or distributors for the right to manufacture and distribute and sell the products of the company. The company will offer to upsell opportunities to its licensees for which it will receive a commission or percentage for selling the data and access to information.

CPV signs OEM Manufacturing Agreement with YY Windows: The company has recently announced that it has signed a new OEM Manufacturing Agreement with Jiangsu YY Windows and Curtain Wall System Co. Ltd, China for  5 years. Under the terms of this agreement, YY Windows will become an OEM manufacturer for the company and will make ClearVue IGU’s (Insulated Glass Unit) and finished windows incorporating the technology of CPV for the purpose of selling either through its licensed distributors or itself. The company, in another release, has also announced that CPV’s provider for registry services has changed from Security Transfer Australia Pty Ltd to Automic Group.

ClearVue appoints Distributor for Hong Kong and Macau: ClearVue Technologies Limited has announced that it has signed an exclusive Distribution Licence Agreement with Full Treasure Engineering Limited in Hong Kong for a period of 5 years. Under the agreement, Full Treasure will become the exclusive licensee to distribute the company’s products and technology in Hong Kong, and Macau and CPV will supply glass IGU’s to Full Treasure at an agreed pricing schedule. The company has received confirmation that its IGU product has met all the prerequisites for IEC 61730 and IEC 61215 certification, which was one of the crucial requirements for sales of the company’s solar PV IGU in Europe and other international markets. This is a major achievement for the company and has cleared the way for it to penetrate the US and certain other UL (Underwriters Laboratories) dependent territories.

ClearVue signs OEM Supply Agreement with BeyondPV of Taiwan: The company has entered into an agreement with a leading developer and designer of photovoltaic technologies, BeyondPV. Under the terms of the agreement, BeyondPV will design, manufacture and supply solar PV strip modules to CPV and its licensed manufacturers for the use in the company’s solar PV IGU’s, windows and smart façades. BeyondPV will invest USD $3.5 million to produce CPV’s solar strip modules and will provide ongoing R&D activities for continuous improvement.

MoU with Glass Partners: ClearVue Technologies Limited has signed a Memorandum of Understanding (MOU) with Glass Partners Holdings Pty Ltd in South Africa and with IoTStream, Zurreal and Global Smart Cities Pty Ltd and has also received orders from UAE through Grafsol and South Africa. The company now has 85 granted patents, with 40 patents pending in different countries around the world. The product certifications offer a significant barrier to entry from competitors. 

ClearVue Vision for 2020: The company expects a larger market opportunity since there are no other architecturally acceptable transparent colourless BIPV products except ClearVue. It expects that there will be an increase in demand for BIPV solutions as there will be more than 29 megacities with 10 million-plus people by 2025. CPV’s glass technology represents an unused prospect to use one of the world’s most used building materials for clean energy generation. The company is on track to complete its final steps towards commercialisation goals and is expecting increased orders because of IEC 61730 and IEC 61215 certification. The company has successfully deployed its technology and is focused on delivering shareholders’ value. CPV is developing new product offerings, particularly a range of ‘smart façade’ solutions such as automatic blinds, electrochromic window tinting and open and closing functionality which is expected to derive growth in the upcoming years.

ClearVue is supported by a capable, experienced and collaborative team which is important to progress the company’s growth goals. The company aims to increase power to 50w+ per sqm and is expecting its first orders from the Asia Pacific, US Licensee and South African /European Licensees. The company is targeting Agriculture and Horticulture markets, Commercial and Residential and Public Amenities, which represents the excess of 2.1 billion sqm² of glass per annum.
 
 

Key Metrics (Source: Thomson Reuters)

Stock Recommendation: As per ASX, the stock of CPV gave a return of 28% in the last three months. The stock is also trading close to its 52-week low of $0.110, proffering a decent opportunity for accumulation. On the TTM basis, the stock is trading at a Price to Book multiple of 3.4x, lower than the industry median (Chemicals) of 4.6x, indicating that the stock is undervalued. The products of the company can be used to achieve considerable energy and cost savings and have a highly scalable business model, offering opportunities for growth. Considering the returns, trading levels, decent growth opportunities and low price to book multiple, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.160 on 31 January 2020.

 
CPV Daily Technical Chart (Source: Thomson Reuters)

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