theworks(fraud,viceroy-research,{chinese pass-thru},Abalance,solar-panels,don't know)
{> Abalance – Turning Japanese? We really don’t think so エーバランス – 日本 企業 化 そんなことは ない だろ う
AUTHOR:Viceroy ResearchPUBLISHED ON:May 17, 2023PUBLISHED IN:Abalance TYO:8356 May 17, 2023 – Abalance (TYO:3856) is a Japanese corporation which purports to be a solar panel manufacturer. Approximately 90% of the company’s revenues are derived from its Vietnamese subsidiary, Vietnam Sunergy Joint Stock Corporation (VSUN). Abalance’s golden goose, Vietnam Sunergy Joint Stock Company (VSUN), is a pass-through assembly plant for Chinese products. It serves the sole purpose of avoiding US Anti-Dumping and CounterVailing Duties (AD/CVD). VSUN’s Vietnamese facilities manufacturing capabilities are limited to the least technically complex later stages of solar panel assembly. VSUN import data shows that it purchases effectively all its components from Chinese suppliers, which it assembles in Vietnam to circumvent Anti-Dumping and Countervailing Duties in the USA: its major market. Abalance’s solar panels will be subject to crippling restrictions by the USA’s Department of Commerce (DoC) set to take effect in June 2024. These restrictions are aimed at companies in Vietnam, Thailand, Malaysia, and Cambodia functioning as pass-throughs for Chinese-made solar panels and components. VSUN was acquired by Abalance subsidiary Fuji Solar in 2019. It was previously a subsidiary of the China Sunergy Group (CSUN). CSUN was a US-listed Chinese solar panel supplier pretending to be a solar panel manufacturer. In reality, its business operations were more akin to a chop-shop. VSUN’s supply chain includes Chinese companies linked to forced labor camps in Xinjiang widely known to use the Uyghur ethnic minority as a forced labor workforce. Despite fully consolidating VSUN and stating it owns ~85% of VSUN, Abalance is only entitled to 43% of VSUN’s earnings (but apparently all the costs) due an opaque corporate structure. We believe Abalance is complicit in evading US AD/CVD order and will find itself shut out from the US in June 2024, if not sooner. The links between VSUN and CSUN are well known, and we believe the DoC will act on this matter. Abalance is extremely dependent on VSUN, making up 88% of sales in FY 2022. Even if VSUN’s cell manufacturing site is developed on-schedule and does not circumvent AD/CVD orders, production capacity will be more than halved for the medium-long term, destroying margins and shareholder value. VSUN appears to be substantially run by former CSUN partners. In light of these extreme risks, we believe that Abalance is not investible.})