SUNPOWER: Here's its success blueprint

                 1. The Chinese government has ordered the mandatory closure of small inefficient dirty coal-fired steam boilers, hence factories in industrial parks across China need to switch to centralized steam boilers that are more efficient and more importantly, non-pollutive.

This will drive immediate demand for Sunpower's steam, quickly ramping up utilization of its GI plants.

         2. Factories are being increasingly concentrated in structured industrial parks where Sunpower's centralized steam boilers are located.

Hence, the natural organic growth of these parks will continuously drive demand for steam and power in the long term.

         3. Within these industrial parks, Sunpower is the exclusive supplier because it holds 30-year concession agreements as the exclusive supplier with right of first renewal of such concessions.

         1. The cashflows of these assets are long term and recurring in nature, and able to deliver a high net present value through attractive double-digit project IRRs.

         2. These high quality cashflows are contributed by captive customers through Sunpower's exclusive business model.

Steam is a non-discretionary input product for its customers, and Sunpower is able to demand prepayment ahead of delivery. This ensures strong tariff collections.

         3. The growth potential of these cashflows is strong, driven by immediate cross-over demand from the mandatory closure of small boilers in the short term, the increasing concentration of factories in industrial parks, and the natural expansion of industrial parks in the long term.

         1. Proprietary energy saving and long-distance steam distribution technology that allows Sunpower to raise high barriers of entry and outbid and outperform the competition

         2. A first mover advantage backed by its established market reputation in combating smog

         3. A management with full interest alignment, experienced in project evaluation and disciplined in cost management to lower risks of cost over runs

         4. An integrated approach with inhouse capabilities in design, manufacturing and services to help lower development and operating costs

         5. A robust deal pipeline to further expand the GI portfolio with attractive projects under evaluation, and

         6. Strong capital support from long-term capital providers to accelerate Sunpower's first mover position.

Key among them is its long-distance steam distribution pipelines. Sunpower's technology reduces the loss of temperature and pressure during steam transmission.

Sunpower can reduce temperature loss to less than 5 degrees celsius per kilometer versus the industry’s 15 degrees celsius. It can limit pressure loss to less than 0.02 to 0.03 megapascal per kilometer versus the industry’s 0.06-0.1 megapascal.

By doing so, it can outperform in two ways.

Other key technologies include its environmental protection technology such as low nitrogen oxide combustion, desulphurization and denitrification that allows Sunpower to beat official pollution emission levels.

In addition, Sunpower possess energy saving technology which supports highly efficient heat exchange and utilization of waste heat.

Sunpower is able to upgrade older plants that it acquires to improve their operating efficiency such that the IRR of the upgraded plants can also hit an attractive level.