Shares of Skycorp Solar Group Ltd experienced a significant surge in U.S. premarket trading on Monday, rising 82.37% to $5.225 from Friday's close of $2.865. The dramatic move followed the company's announcement that it has agreed to acquire the remaining 56% stake in Nanjing Cesun Power Co., a move that will bring the renewable energy firm under full ownership.
The acquisition, valued at $20.2 million, will be paid entirely in stock, with Skycorp issuing 3.079 million Class A shares and 4.904 million Class B shares to complete the transaction. The deal is expected to substantially increase Skycorp's share count, potentially doubling the total number of ordinary shares outstanding to approximately 12.2 million.
This development comes on the heels of Skycorp's recent compliance with Nasdaq's minimum bid price requirement. The company had implemented a 1-for-20 reverse stock split on April 13, which helped lift its share price above the $1 threshold. On April 27, Nasdaq confirmed that Skycorp had regained compliance after its Class A shares traded at or above $1 for 10 consecutive trading days.
In addition to the acquisition, Skycorp announced a private placement of 1.694 million Class A shares at approximately $1.77 each, raising $3 million from investors including Hoping Group Ltd, Matrix Sea Ltd, and Hoping AI Machine Pte Ltd. The private placement shares carry a six-month lockup period and were priced at a 30% discount to the company's 10-day average closing price.
Nanjing Cesun Power brings a diversified renewable energy portfolio to Skycorp, including server hardware, inverters, photovoltaic power stations, and energy management systems. The addition of inverter technology represents a strategic expansion beyond Skycorp's traditional cables and connectors business. CEO Huang Weiqi described the acquisition as a "pivotal milestone" that will integrate Nanjing Cesun's operations directly into Skycorp's renewable energy portfolio.
The solar inverter market, however, remains highly competitive. According to Wood Mackenzie, Huawei and Sungrow led the global solar inverter rankings for the first half of 2025, with the top 10 manufacturers capturing 71% of the worldwide market. The research firm also forecasts a 2% decline in global inverter shipments in 2025, followed by a steeper 9% drop in 2026 to 523 GWac, as price pressures intensify from Chinese manufacturers.
Skycorp's financial performance has been under pressure. The company reported a net loss of $2.21 million for fiscal 2025, compared to net income of $1.17 million in the prior year. Gross margins also contracted to 9.95% from 13.10%, reflecting increased pricing competition and a more challenging operating environment.
The transaction is not without risks. The acquisition involves related-party elements, with 20% of the stake being purchased directly from CEO Huang and the remaining 36% from EZPower Ltd. While the audit committee has approved the deal, several conditions remain before closing. Additionally, Skycorp's corporate structure as a Cayman Islands holding company with operations primarily through its PRC subsidiaries introduces regulatory uncertainties that could impact the company's ability to operate or maintain its U.S. listing.
Despite these challenges, the acquisition provides Skycorp with a more comprehensive energy portfolio and an injection of capital. The company's ability to successfully integrate Nanjing Cesun and generate sustainable revenue streams will be critical in determining whether this strategic move ultimately benefits shareholders.
