Borqs Technologies, Inc. (Nasdaq: BRQS, “Borqs,” or the “Company”),
a global provider of embedded software and products for the
Internet of Things (IoT) and a portfolio company of Qualcomm
Technologies, today announced it signed a preliminary binding term
sheet to acquire a 51% ownership interest in Holu Hou Energy LLC
(HHE), an innovative solar energy and storage provider for the
residential, multi-family residential and commercial building
markets. HHE has developed a state-of-the-art energy storage system
for multi-dwelling unit properties and single-dwelling residences.
HHE’s Smart Home Energy System also includes a remote monitoring,
management and control platform. An important initiative of Borqs’s
business strategy is focusing on growing its Smart Home Energy
System platform, which addresses a US Smart Home market expected to
grow to $62.7 billion by 2023, according to research firm Statista,
and a global market expected to grow to $622 billion by 2026
(Fortune Business Insights, April 12, 2021). Holu Hou has nearly
$150 million of projects in its development pipeline, with
approximately $90 million in multi-dwelling unit projects and more
than $57 million of commercial projects.
The HHE energy storage system utilizes a
proprietary technology for the sharing of excess PV generation
between multiple units in multi-dwelling unit (MDU) properties,
which significantly increases the utilization of solar power
generation while decreasing the number of batteries required. HHE
is the only company in the US market currently able to deliver this
innovative micro-grid capability, and the first to open the vast
MDU market to solar generation. The first such site in the US, the
134-unit Koa’e Workforce Housing property, is now in operation in
Kauai, Hawaii.
For residential housing, their systems include
climate control, which optimizes air conditioning units, energy
efficient lighting, solar arrays on the roof to meet energy
requirements of the home, major appliance load control, energy for
backup power and peak loads, and EV charger integration. The base
product supports up to 4-strings of PV and up to 2x 15kWh
batteries.
HHE has also developed and installed 60+
commercial PV projects ranging in size from 20kW-1.4MW and has a
project development, design and financing capability. Clients
include the Koa’e Workforce Housing Property, Crosspointe Townhome
and Condominium Development, the University Marketplace in Honolulu
(also known as Aloha Tower), the largest PV install in downtown
Honolulu, HPU Oceanic Institute, and numerous single-dwelling
residential homes.
HHE entered the market in Hawaii, where grid
electricity rates are among the highest in the US, with
approximately 50,000 MDU residences unserved by solar. It intends
to expand into California in 2022, a market that is likely more
than 30 times larger, with summer peak electricity rates that can
exceed $0.40/kWh, along with frequent grid outages.
The acquisition of a 51% interest in HHE is
expected to benefit both companies with multiple synergies,
including:
- Borqs’s state-of-the-art IoT software and hardware design can
be used to enhance connection functionalities for management and
monitoring at HHE
- Expands supply chain sourcing from China
- Provides cross selling opportunities and the potential for
rapid client expansion, particularly in the US
- Provides Borqs with Proprietary Technology
“Holu Hou’s differentiated and integrated
residential energy storage system and energy share technology
provides BRQS with proprietary technology and addresses a
fast-growing multi-billion market opportunity. We believe this
acquisition will put us on the path to high margin triple digital
revenue growth that will generate significant EBITDA. It also
provides BRQS with an entrance into the multi-family residential
market. This is a key initiative of Borqs’s IoT smart city
strategy,” commented Pat Chan, Chairman & CEO of Borqs
Technologies. “Historically, multi-family properties have been
closed to renewables due to load and vacancy risk. With Holu Hou’s
advanced aggregation technology, these typical economic risks are
mitigated, ultimately improving efficiency for the renewable
investment. The system will benefit from Borqs’ state-of-the-art
and secure IoT technologies for management and monitoring.”
“Based on current forecasts, Holu Hou is
expected to generate $3 million EBITDA in 2021, with EBITDA
contribution expanding to more than $31 million by 2025,” added
Chan. “Holu Hou’s revenues are anticipated to grow seven-fold over
the same period, reaching $145 million in 2025, up from an
estimated $20 million in 2021.”
“We’re delighted to partner with BORQS
Technologies to bring our vision of energy independence through
solar and energy storage to communities and residences in the USA,”
said Brad Hansen, Holu Hou Energy CEO. “BORQS brings several
enabling IoT, supply chain and software development capabilities
that will enable us to more rapidly accomplish our objectives in
the markets we serve.”Conference Call Details:
Borqs Technologies - Investor Update CallDate
and Time: Thursday September 9, 2021, 4:15 PM ETConference ID:
13722964
Participant Dial-In NumbersToll Free:
1-877-705-6003Toll/International: 1-201-493-6725
Replay Dial-In NumbersToll Free:
1-844-512-2921Toll/International: 1-412-317-6671Replay Pin Number:
13722964
Replay Start: Thursday September 9, 2021, 7:15
PM ETReplay Expiry: Thursday September 23, 2021, 11:59 PM ET
About Borqs Technologies,
Inc.Borqs Technologies is a global leader in software and
products for the IoT, providing customizable, differentiated and
scalable Android-based smart connected devices and cloud service
solutions. Borqs has achieved leadership and customer recognition
as an innovative end-to-end IoT solutions provider leveraging its
strategic chipset partner relationships as well as its broad
software and IP portfolio.
Borqs’ unique strengths include its Android and
Android Wear Licenses which enabled the Company to develop a
software IP library covering chipset software, Android
enhancements, domain specific usage and system performance
optimization, suitable for large and low volume customized
products. The Company is also currently in development of 5G
products for phones and hotspots.
About Holu Hou Energy LLCHolu
Hou Energy LLC, a Delaware limited liability company, brings
state-of-the-art energy storage systems to the Single-Family
Residential, Multi-Family Residential and Commercial building
markets. With operations in California, Hawaii, Wisconsin and
Shanghai, HHE engineers proprietary storage system and software and
control platform solutions. The HHE team is made up of renewable
energy industry veterans, engineering and deploying energy storage
systems that enable greater energy independence. For more
information, visit www.holuhou.com.
Forward-Looking Statements and
Additional InformationThis press release includes
“forward-looking statements” that involve risks and uncertainties
that could cause actual results to differ materially from what is
expected. Words such as “expects”, “believes”, “anticipates”,
“intends”, “estimates”, “predicts”, “seeks”, “may”, “might”,
“plan”, “possible”, “should” and variations and similar words and
expressions are intended to identify such forward-looking
statements, but the absence of these words does not mean that a
statement is not forward-looking. Such forward-looking statements
relate to future events or future results, based on currently
available information and reflect our management’s current beliefs.
Many factors could cause actual events or results to differ
materially from the events and results discussed in the
forward-looking statements, including the possibility that the
acquisition of a 51% ownership interest in HHE may not be
consummated as described herein, or at, that the positive benefits
of the acquisition to the Company may not transpire as described
herein or at all, or that the financing needed for the acquisition
may not be available at acceptable terms to the Company, and the
negative impact of the COVID-19 pandemic on the Company’s supply
chain, revenues and overall results of operations, so the reader is
advised to refer to the Risk Factors sections of the Company’s
filings with the Securities and Exchange Commission for additional
information identifying important factors that could cause actual
results to differ materially from those anticipated in the
forward-looking statements. Except as expressly required by
applicable securities law, the Company disclaims any obligation to
update any forward-looking statements, whether as a result of new
information, future events or otherwise.
Investor Contact:Dave GentryRedChip Companies
Inc.Dave@redchip.com1-800-RED-CHIP (733-2447)407-491-4498
Investor Contact:Sandra DouVice President of
Corporate Finance Borqs Technologies, Inc. sandra.dou@borq.net
www.borqs.com
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