Thursday 28 Mar 2024
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KUALA LUMPUR (June 8): Trive Property Group Bhd will be collaborating with a Chinese firm to collaborate on research and development, production, assembly, distribution, and marketing of solar systems.

The group has inked a Memorandum of Understanding (MoU) with Fortunate Solar Technology Ltd for the purpose.

The move, according to the battery management systems and solar systems trader in a statement today, will allow it to focus on its core business of designing, developing and marketing of green and renewable energy products, particularly solar-related products.

Under the MoU, Trive said both parties have agreed to inject a total of RM60 million to establish a joint venture company (JVCo) in Malaysia, in which both companies will have an equal stake. The JVCo will be renting a parcel of land and building for its factory in Kulim Hi-Tech Park, Kedah.

"The fund will be used to set up a production line in the new factory, which will provide the full range of products or one-stop solutions in the solar business," said Trive.

Fortunate Solar was incorporated in the Shu Yang County of the Jiang Su Province. It is an integrated high-tech provider of solar products and services, silicon products and services (such as solar ingot), wafer and solar cell.

Commenting on the deal, Trive executive director Kua Khai Shyuan said that the final solar products will be sold to their local market and the balance thereof will be exported to US, Europe and the rest of the world.

With this joint venture, he said Trive is able to mark a footprint in China market with huge potential revenue generated.

"It is noted that China itself accounted for 23% of the cumulative global photovoltaic system (PV-Tech) installations in 2016,” he added.

Trive shared that the JV will enjoy 10 years of free corporate tax in Malaysia upon its successful application for pioneer status.

Nevertheless, Kua is cautious of the many uncertainties, ahead and current local and global slowdown of economic environment.

"Trive (will) work relentlessly to return its earnings to the black. Trive is looking forward to improve its bottom lines and to continuously seek for every opportunity to yield a better return to its shareholders and sustain the business with the consideration of all stakeholders," he added.

Trive, which has been loss-making since FY12, is very optimistic about the future growth of solar industry over the world.

Trive's net loss widened to RM11.67 million in FY15 from RM6.59 million in FY12. The losses was mainly due to impairment on other receivables, depreciation of property, plant and equipment, and operating costs.

For its cumulative 18 months ended Jan 31, 2016 (FY16), the group's net loss almost doubled to RM34.92 million, from RM17.63 million a year ago. The longer financial period was because the group had changed its financial year end to Jan 31.

Shares in Trive closed unchanged at 4.5 sen today, valuing it at RM60.4 million.

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