The collaboration agreement announced by air conditioning company Tadiran Holdings (TASE: TDRN) with green energy company Apollo Power (TASE: APLP) puts the spotlight on the latter as an outstanding example of a hot trend in Tel Aviv of investment in young green-energy technology companies, even those with negligible revenue and heavy losses.
The case of Apollo Power is an extreme one. Its share price has shot up by about 1,800% within less than a year, bringing it to a market cap of no less than NIS 1 billion, all this thanks, apparently, to the potential that investors see in its business.
Apollo Power, which listed on the Tel Aviv Stock Exchange in late 2017 through a merger with stock exchange shell company Or City (formerly controlled by real estate developer Inbal Or), presents itself as "a cleantech company motivated by the vision of producing solar energy in an innovative way from any surface exposed to sunlight, with no need to clear additional open areas."
Through its wholly owned subsidiary SolarPaint, Apollo Power claims to have "unique technology for producing a light and flexible solar sheet that is durable and economical and that can be applied independently or in combination with a range of materials."
The company is still accumulating substantial losses, amounting to NIS 32 million over the past three years (2018-2020), alongside negligible revenue (some NIS 500,000 in 2020) and negative cash flow from regular activities.
All this has not stopped the share price from taking, with the main beneficiaries so far from the meteoric rise in Apollo Power's value being the two controlling shareholders, brothers Yishai and Yosef Mor, who hold 51% of the company through private company Vestar, worth around NIS 500 million at the current market price.
Apollo Power CEO Oded Rozenberg, who is one of the founders together with CTO Eran Maimon and Ido Hadar, holds 2%, worth about NIS 10 million, and company chairman Gen. (res.) Yom-Tov Samia holds 0.2%, worth about NIS 2 million.
As Apollo Power and Tadiran Holdings state in the agreement they have just signed (completion of which is subject to several preconditions), the cleantech company's products "facilitate the establishment of solar energy projects in places where it is difficult to set up such projects using standard solar panels."
Among such places, the companies say, are "roofs of buildings and greenhouses where there weight restrictions, on uneven surfaces, or where the customer wants to incorporate solar film on roofs made of light materials such as pergolas, roofs of stadiums, awnings, agricultural greenhouses and so on."
The agreement with Tadiran is the latest in a series of announcements of collaborations, initiatives and investments that Apollo Power has made that have made investors excited about its future.
In July last year, when the rise in the company's share price began in earnest, Apollo Power announced an MOU with car maker Audi on incorporating its solar film technology on Audi vehicles, and in September it reported an agreement with defense company Rafael "to examine the feasibility of incorporating solar film technology in materials for defense products."
In October, Apollo Power announced an agreement with the Carmel Coast Agricultural Association for setting up a pilot floating solar array for several hundred thousand shekels.
A few weeks later, the company reported an agreement for supplying solar film to a company owned by Chinese car maker Geely, which among other things owns the Volvo brand, and an agreement for carrying out inspection of its products with the R&D center "of one of the leading vehicle manufacturers in Asia."
Apollo Power also announced agreements to purchase additional production machinery that would help it to increase output and approval by the Investment Authority of a plan to invest $5 million in constructing a factory at Yokne'am.
Apollo Power recently took advantage of the growing interest in its stock to raise NIS 75 million from several investors headed by The Phoenix Holdings Ltd. (TASE: PHOE1;PHOE5) and More Investment House through an allocation of 13% of the company at the end of March at a price of NIS 16 per share, which at the time was close to the market price. Since then, the share price has risen by more than 70%.
Published by Globes, Israel business news - en.globes.co.il - on May 9, 2021
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