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QUALFAST LTD, LANODULA LTD, EVESAFE LTD, WHOLEREX LTD AND CELERNIUM LTD INDEX TO COMBINED CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on October 22, 2014

Registration No. 333-198817


SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



Amendment No. 1
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



Sky Solar Holdings, Ltd.
(Exact name of registrant as specified in its charter)
Not Applicable
(Translation of registrant's name into English)

Cayman Islands
(State or other jurisdiction of
incorporation or organization)
  4931
(Primary Standard Industrial
Classification Code Number)
  Not Applicable
(I.R.S. Employer
Identification Number)

Suite 1604, 9 Queen's Road, Central
Hong Kong Special Administrative Region
People's Republic of China
+852 2107 3188

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)



Puglisi & Associates
850 Library Avenue, Suite 204
Newark, DE 19711
+1 302 738 6680

(Name, address, including zip code, and telephone number, including
area code, of agent for service)



Copies to:

Shuang Zhao, Esq.
Shearman & Sterling LLP
c/o 12th Floor, Gloucester Tower
15 Queen's Road Central
Hong Kong
+852 2978 8002

 

Jonathan Zonis, Esq.
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
+1 (212) 878-3250



         Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

         If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

         If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

         If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earliest effective registration statement for the same offering.    o



CALCULATION OF REGISTRATION FEE

               
 
Title of each class of securities
to be registered(1)(2)

  Amount of Shares to be Registered(1)(3)
  Proposed Maximum Aggregate
Offering Price per Share(1)(3)

  Proposed maximum aggregate
offering price(3)

  Amount of
registration fee

 

Ordinary shares, nominal value US$0.0001 per share

  115,000,000   US$1.50   US$172,500,000   US$21,304.50(4)

 

(1)
Includes ordinary shares initially offered and sold outside the United States that may be resold from time to time in the United States either as part of their distribution or within 40 days after the later of the effective date of this registration statement and the date the shares are first bona fide offered to the public. These ordinary shares are not being registered for the purposes of sales outside of the United States. Also includes 15,000,000 ordinary shares that may be purchased by the underwriters pursuant to their option to purchase additional ADSs.

(2)
American depositary shares issuable upon deposit of the ordinary shares registered hereby have been registered under a separate registration statement on Form F-6 (Registration No. 333-199512). Each American depositary share represents eight ordinary shares.

(3)
Estimated solely for the purpose of determining the amount of registration fee in accordance with Rule 457(a) under the Securities Act of 1933.

(4)
The Registrant previously paid US$12,880 in connection with the initial filing of the Registration Statement on September 18, 2014.



         The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to such Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated October 22, 2014

PROSPECTUS

12,500,000 American Depositary Shares

LOGO

Sky Solar Holdings, Ltd.

Representing 100,000,000 Ordinary Shares



        This is the initial public offering of American depositary shares, or ADSs, of Sky Solar Holdings, Ltd. We are offering 12,500,000 ADSs. Each ADS represents eight ordinary shares, nominal value US$0.0001 per share. No public market currently exists for our ADSs.

        We have applied to list our ADSs on the NASDAQ Global Select Market under the symbol "SKYS."

        We currently anticipate that the initial public offering price will be between US$10.00 and US$12.00 per ADS.

        We are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012 and are therefore eligible for reduced reporting requirements.



        Investing in our ADSs involves risks. See "Risk Factors" beginning on page 13 of this prospectus.



       
 
 
  Per ADS
  Total
 

Price to the public

  US$                       US$                    

Underwriting discounts and commissions

  US$                       US$                    

Proceeds to us (before expenses)

  US$                       US$                    

 

        See "Underwriting" for a description of the compensation payable to the underwriters.

        We have granted the underwriters a 30-day option to purchase up to an additional 1,875,000 ADSs at the initial public offering price less the underwriting discounts and commissions.

        Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed on the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the ADSs evidenced by the ADRs on or about                                    , 2014.



FBR

  Cowen and Company



    Roth Capital Partners
Northland Capital Markets
   



Prospectus dated                        , 2014


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GRAPHIC


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TABLE OF CONTENTS

 
  Page

Prospectus Summary

  1

Risk Factors

  13

Special Note Regarding Forward-Looking Statements

  44

Use of Proceeds

  46

Dividend Policy

  47

Capitalization

  48

Dilution

  49

Enforceability of Civil Liabilities

  51

Corporate History and Structure

  54

Selected Consolidated Financial and Operating Data

  56

Management's Discussion and Analysis of Financial Condition and Results of Operations

  59

Industry

  90

Business

  99

Regulations

  128

Management

  144

Principal Shareholders

  153

Related Party Transactions

  155

Description of Share Capital

  161

Description of American Depositary Shares

  174

Shares Eligible for Future Sale

  183

Taxation

  186

Underwriting

  193

Expenses Related to this Offering

  200

Legal Matters

  201

Experts

  201

Where You Can Find Additional Information

  202

Index to Consolidated Financial Statements of Sky Solar Holdings, Ltd.

  F-1

Index to Combined Consolidated Financial Statements of Qualfast Ltd, Lanodula Ltd, Evesafe Ltd, Wholerex Ltd and Celernium Ltd

  F-114

Index to Unaudited Pro Forma Consolidated Statement of Qualfast Ltd., Lanodula Ltd., Evesafe Ltd., Wholerex Ltd., and Celernium Ltd. of Profit or Loss and Comprehensive Income (Expense)

  P-1



        No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus or in any free writing prospectus that we may authorize to be delivered or made available to you. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so.

        Neither we nor the underwriters have done anything that would permit this offering or possession or distribution of this prospectus or any filed free writing prospectus in any jurisdiction where action for that purpose is required, other than in the United States. Persons outside the United States who come into possession of this prospectus or any filed free writing prospectus must inform themselves about, and observe any restrictions relating to, the offering of the ADSs and the distribution of this prospectus or any filed free writing prospectus outside of the United States.

        Until                        , 2014 (the 25th day after the date of this prospectus), all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as an underwriter and with respect to their unsold allotments or subscriptions.

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PROSPECTUS SUMMARY

        The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements appearing elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in the ADSs discussed under "Risk Factors," before deciding whether to buy our ADSs.


Our Business

Overview

        We are a global independent power producer, or IPP. We develop, own and operate solar parks and generate revenue primarily by selling electricity. We have focused on the downstream solar market since our inception and have developed projects in Asia, South America, Europe, North America and Africa. We believe our broad geographic reach and established presence across key solar markets are significant differentiators that provide global opportunities and mitigate country-specific risks. We aim to establish operations in Japan, Chile, Uruguay and other select geographies with highly attractive solar radiation, regulatory environments, power pricing, land availability, financial access and overall power market trends. By design, we focus on the downstream photovoltaic, or PV, segment, and as a result, we are technology agnostic and we can customize our solar parks based on local environmental and regulatory requirements.

        Prior to becoming an IPP, we sold our solar parks. We initiated our global IPP model in 2012. In 2013, we began to strategically reduce our system sale business in favor of the IPP model in order to retain more value from project development and generate stable and recurring long-term cash flow. By the fourth quarter of 2013, we began to generate a majority of our revenue from selling electricity from IPP solar parks. We intend to leverage our established pipeline projects and increased financing capabilities to expand our IPP business. We may also optimize our portfolio from time to time by selling solar energy systems or establishing joint ventures, depending on project economics, local power markets and the regulatory conditions.

        We have access to a variety of financing sources and a demonstrated ability to design cost-effective project funding solutions. We are well positioned to create efficient financing solutions that are responsive to local regulatory conditions and financial markets. We believe we can leverage our global presence to reduce our financing costs with alternatives from different geographies.

        As of the date of this prospectus, we have developed and completed 198 solar parks with an aggregate capacity of 181.0 MW in Greece, Japan, Bulgaria, the Czech Republic, Spain, Canada and Germany. Under our IPP revenue model, we currently own and operate 53.9 MW of solar parks, including 23.0 MW in Greece, 18.7 MW in Japan, 5.6 MW in the Czech Republic, 3.7 MW in Bulgaria, 2.0 MW in Canada and 0.9 MW in Spain. Most of our power purchase agreements, or PPAs, fix the price of electricity sold by our IPP solar parks for 20 years or more. In addition to our existing operational project portfolio, we have over 1.3 GW of solar projects in various stages of development in countries such as Chile, Uruguay, Japan, Canada and South Africa, consisting of 16.9 MW under construction, 266.8 MW of shovel-ready projects and 1,054.7 MW of solar parks under development. We classify 544.8 MW of these solar projects under development as advanced or qualified and expect them to become shovel-ready projects within 12 to 18 months.

        We believe that our proven track record of identifying and developing revenue-producing solar parks, operating under local conditions, developing local relationships and managing a global platform provide us with substantial advantages over both local and international PV project developers. We intend to continue selectively expanding our operations with a near-term focus on key solar markets, such as Japan, Chile, Uruguay and Canada and a medium-term focus on the developing China market.

        Our revenue was US$83.1 million, US$203.8 million, US$36.5 million and US$14.4 million in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. Our gross profit was US$24.0 million,

 

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US$61.3 million, US$7.2 million and US$6.1 million in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. We generated profit of US$7.1 million and US$26.9 million and incurred losses of US$53.9 million in 2011, 2012 and 2013, respectively. We incurred losses of US$8.2 million in the six months ended June 30, 2014. The decrease in revenue in 2013 and the six months ended June 30, 2014 was primarily due to shifting our focus from selling solar energy systems to selling electricity as an IPP. Our IPP solar parks provide attractive long-term recurring revenue from selling electricity. From 2012 to 2013, our revenue from selling electricity from IPP solar parks grew from US$4.5 million to US$8.0 million, representing 2.2% and 22.0% of our revenue, respectively. Our revenue from selling electricity grew from US$2.4 million in the six months ended June 30, 2013 to US$11.8 million in the same period of 2014, representing 10.2% and 82.1% of our revenue, respectively. The total capacity of our IPP solar parks was 23.9 MW, 43.2 MW and 51.8 MW, and the total carrying value of our IPP solar parks was US$43.4 million, US$119.5 million and US$146.8 million as of December 31, 2012, December 31, 2013 and June 30, 2014, respectively.


Our Competitive Strengths

        We believe the following competitive strengths have contributed and will continue to contribute to our success:

    Our proven track record of identifying and entering PV markets, on-the-ground capabilities and global platform give us key competitive advantages in developing and operating solar parks globally.

    Our extensive portfolio of shovel-ready projects and pipeline solar parks provides us with clear and actionable opportunities to grow power generation and earnings.

    Our comprehensive project development capabilities allow us to consistently deliver high quality solar parks at competitive costs.

    We are supplier- and technology-agnostic and we have the flexibility to choose from a broad range of leading manufacturers, suppliers and EPC vendors globally.

    We have access to a variety of financing sources and a demonstrated ability to design cost-effective project funding solutions.

    We are led by a highly experienced management team supported by strong, localized execution capabilities across all key functions and locations.


Our Strategies

        We aim to strengthen our position as a leading developer, owner and operator of solar energy assets and expand our IPP business to include other forms of renewable energy. To achieve this goal, we intend to pursue the following strategies:

    Expand our global IPP portfolio in regions with attractive returns on investment and increase our stable recurring revenue and cash flow.

    Optimize our financing sources to support long term growth and profitability in a cost-efficient manner.

    Improve our in-house capabilities for project development, operations and risk management.


Our Challenges

        Our ability to successfully execute our strategies is subject to risks and uncertainties, including but not limited to:

    The reduction, modification or elimination of government subsidies and economic incentives may reduce the economic benefits of our existing solar parks and our opportunities to develop or acquire suitable new solar parks.

 

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    We conduct our business operations globally and are subject to global and local risks related to economic, regulatory, social and political uncertainties.

    Our growth prospects and future profitability depend to a significant extent on global liquidity and the availability of additional funding options with acceptable terms.

    The delay between making significant upfront investments in our solar parks and receiving revenue could materially and adversely affect our liquidity, business and results of operations.

    Our limited operating history, especially with large-scale IPP solar parks, may not serve as an adequate basis to judge our future prospects and results of operations.

    We may not be able to develop or acquire additional attractive IPP solar parks to grow our project portfolio.

    Failure to manage our growing and changing business could have a material adverse effect on our business, prospects, financial condition and results of operations.

    Our future success depends significantly on the continued service of our senior management team and our ability to attract, train and retain qualified personnel.

    Our international operations require significant management resources and present legal, compliance and execution risks in multiple jurisdictions.

    Our IPP business requires significant financial resources. If we do not successfully execute our financing plan, we may have to sell certain of our IPP solar parks or risk not being able to continue as a going concern.

    Our transactions with our historical project affiliates may not be on an arm's length basis.

        See "Risk Factors" and "Special Note Regarding Forward-Looking Statements" for a discussion of these and other risks and uncertainties associated with our business and investing in our ADSs.


Market Opportunities

        Solar power systems directly transform sunlight into electricity. Grid operators view solar power favorably, as solar generation tends to peak in the mid-afternoon in line with energy demands. Furthermore, PV systems do not emit air, water, noise, vibration or waste pollution or impact the environment beyond the site itself. They are not susceptible to fuel price volatility and require substantially less maintenance than any other form of electricity generation. In addition, their general proximity to end consumers reduces the energy lost in transmission and distribution compared to other systems.

        Accordingly, the PV industry has witnessed significant growth over the past decade. According to The Renewable Energy Policy Network, the world PV capacity grew at a compound annual growth rate, or CAGR, of approximately 44% from 2003 to reach 139 GW in 2013. Under the European Photovoltaic Industry Association forecast scenario, the world PV generation capacity is expected to grow to 375 GW in 2018, representing a five-year CAGR of 22%.

        The PV industry has been driven by a number of government programs encouraging the adoption of solar power and other renewable energy sources. However, there has been a meaningful reduction in the cost of solar energy systems over the past five years. As a result, the levelized cost of energy, or LCOE, of solar is increasingly economically competitive compared to other forms of energy. Downstream market participants, which develop and in many cases retain solar power projects, are benefitting from these favorable market trends, capturing higher margins and long-term income from power generation.

 

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Corporate Information

        Our principal executive offices are located at Suite 1604, 9 Queen's Road Central, Hong Kong Special Administrative Region, People's Republic of China. Our telephone number at this address is +852 2107 3188 and our fax number is +852 2107 3199. Our registered office in the Cayman Islands is located at the offices of Codan Trust Company (Cayman) Limited at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

        Investor inquiries should be directed to us at the address and telephone number of our principal executive offices set forth above. Our website is www.skysolargroup.com. The information contained on our website is not part of this prospectus. Our agent for service of process in the United States is Puglisi & Associates at 850 Library Avenue, Suite 204, Newark, DE 19711. The telephone number at this address is +1 302 738 6680.


Corporate History and Structure

        We are a Cayman Islands holding company and conduct all of our business through and derive all of our income from our investment holding subsidiaries and operating subsidiaries in various countries around the world.

        In 2007, our founder and executive chairman, Mr. Weili Su, already a successful businessman and founder of a few solar companies in China, made investments in Europe and began to develop renewable energy power parks in Germany, the Czech Republic and Spain. Beginning in 2009, he expanded his investments to Japan, Canada and the United States, focusing on the construction and operation of solar parks. A number of these ventures became part of our current operations. Mr. Su continues to lead our business as the executive chairman of our board of directors. After giving effect to the Conversion and the Share Distribution and after this offering, Mr. Su will have the ability to vote or the proxy to vote an aggregate of 40.9% of our outstanding shares. Mr. Su, through a company wholly-owned by his trust, has granted one of our Japanese silent partners, an affiliate of an international private equity firm, the right to purchase $30 million of shares, based on the price as of the date of this prospectus, during a two-year period commencing on the date which is 180 days after the pricing date of this initial public offering, which if exercised, would result in Mr. Su having the ability to vote or the proxy to vote an aggregate of 36.0% of our outstanding shares, assuming an initial public offering price of US$11.00 per ADS, the mid-point of the estimated price range set forth on the cover of this prospectus. For more information on the Conversion, the Share Distribution and Mr. Su's beneficial ownerships in our company, see "Capitalization" and "Principal Shareholders." For more information about our history and structure, see "Corporate History and Structure".

        The following chart illustrates the principal entities in our current corporate structure:

GRAPHIC

        For the principal activities that each of our principal subsidiaries engage in, see "Corporate History and Structure."

 

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Conventions that Apply to This Prospectus

        Unless otherwise indicated, references in this prospectus to:

    "ADRs" are to the American depositary receipts, which, if issued, evidence our ADSs;

    "ADSs" are to our American depositary shares, each of which represents eight ordinary shares, nominal value US$0.0001 per ordinary share;

    "China" and the "PRC" are to the People's Republic of China, excluding, for the purposes of this prospectus only, Taiwan and the special administrative regions of Hong Kong and Macau;

    "EPC" are to engineering, procurement and construction services;

    "FIT" are to feed-in tariff(s);

    "historical project affiliates" are to certain operating entities in which we have had or currently have a minority interest, ChaoriSky Solar Energy S.a.r.l., RisenSky Solar Energy S.a.r.l. and China New Era International Limited;

    "HK$" and "H.K. dollar" are to the legal currency of the special administrative region of Hong Kong;

    "IPP" are to independent power producer and refer to our business where we own and operate solar parks and derive revenue from selling electricity to the power grid;

    "IPP solar park(s)" are to solar generators which we own for the purpose of generating income from the sale of electricity over the life of the solar park(s);

    "kWh" are to kilowatt hour(s);

    "MW" are to megawatt(s);

    "MWh" are to megawatt hour(s);

    "O&M" are to operations and maintenance services provided for commercially operating solar parks;

    "ordinary shares" are to our ordinary shares, nominal value US$0.0001 per share;

    "PPA" are to power purchase agreements;

    "PV" are to photovoltaic;

    "RMB" and "Renminbi" are to the legal currency of China;

    "shovel-ready projects" are to projects that have all permits required for construction and grid connection, even if those projects may lack certain non-discretionary permits for which we have begun the application process and which will be granted and maintained based on our compliance with certain administrative procedures. For more information about our shovel-ready projects, including the anticipated timing of any outstanding permits, see "Business—Global Reach—Featured Countries."

    "solar energy system sales" or "selling solar energy systems" refer to projects where we have derived revenue from selling permits and providing EPC services or selling commercially operational solar parks.

    "solar parks in operation" are to solar parks that have completed construction and are selling electricity. For more information about our solar parks in operation, see "Business—Our IPP Solar Parks."

 

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    "solar parks under construction" are to solar parks that have secured site control, energy permits, all key agreements, zoning and environmental permissions and construction permits. For more information about our solar parks under construction, see "Business—our IPP Solar Parks."

    "solar projects in pipeline" are to solar parks that are being studied for feasibility or have achieved certain milestones, but are not yet ready for construction. For more information about solar parks in our pipeline, see "Business—Our IPP Solar Parks."

    "US$" and "U.S. dollar" are to the legal currency of the United States of America;

    "watt" or "W" are to the measurement of total electrical power, where "kilowatt" or "kW" means one thousand watts, "megawatts" or "MW" means one million watts and "gigawatt" or "GW" means one billion watts; and

    "we," "us," "our company", "our" and "Sky Solar" are to Sky Solar Holdings, Ltd., its parent company Sky Power Group Ltd. which owns 100% of Sky Solar, its predecessor entities and its consolidated subsidiaries.

        Unless otherwise indicated, information in this prospectus assumes that the underwriters do not exercise their option to purchase additional ADSs. We report under International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or the IASB.

        This prospectus contains statistical data that we obtained from various government and private publications. We have not independently verified the data in these reports. Statistical data in these publications also include projections based on a number of assumptions. If any one or more of the assumptions underlying the statistical data turns out to be incorrect, actual results may differ from the projections based on these assumptions. Unless context otherwise requires, market data regarding the solar industry is derived from an uncommissioned third-party research report from NPD SolarBuzz.

        We calculate the size of the PV market based on the volume of PV modules delivered to installation sites, including modules awaiting installation or connection to the power grid. Unless otherwise stated, the PV market relates to annual volume. PV panels generate direct current (DC) electricity, while electricity systems are based on alternating current (AC) electricity. The data presented in DC power numbers are, on average, greater by approximately 15% than the equivalent AC power numbers. All historical and forecast data are presented in DC power numbers. Certain reported AC power numbers have been converted to the equivalent DC power numbers. Our permits are generally calculated using AC power numbers and such AC power numbers have been converted to the equivalent DC power numbers in this prospectus.

        We calculate the attributable capacity of a solar park by multiplying the percentage of our equity ownership in the solar park by the total capacity of the solar park. Unless specifically indicated or the context otherwise requires, capacity of a solar park in this prospectus refers to attributable capacity.

        The conversion of euro, Japanese yen and Hong Kong dollars, respectively, into U.S. dollars in this prospectus, made solely for the convenience of readers, is based on the noon buying rates in the city of New York for cable transfers of euro, Japanese yen and Hong Kong dollars, respectively, as certified for customs purposes by the Federal Reserve Bank of New York as of June 30, 2014, which was EUR1.3690 to US$1.00, JPY101.28 to US$1.00 and HK$7.7502 to US$1.00, respectively, unless indicated otherwise. No representation is intended to imply that the euro, Japanese yen and Hong Kong dollar amounts could have been, or could be, converted, realized or settled into U.S. dollars at the foregoing rates or any other rate.

        The conversion of Czech Koruna, or CZK, into U.S. dollars in this prospectus, made solely for the convenience of readers, is based on the exchange rate declared by Czech National Bank, the central bank of the Czech Republic, as of December 31, 2012, which was CZK19.055 to US$1.00. No representation is intended to imply that the CZK amounts could have been, or could be, converted, realized or settled into U.S. dollars at that rate or any other rate.

 

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The Offering

Price per ADS   We currently estimate that the initial public offering price will be between US$10.00 and US$12.00 per ADS.

ADSs offered by us

 

12,500,000 ADSs (or 14,375,000 ADSs if the underwriters exercise their option to purchase additional ADSs in full).

Option to purchase additional ADSs

 

We have granted the underwriters an option, exercisable within 30 days from the date of this prospectus, to purchase up to an aggregate of 1,875,000 additional ADSs.

ADSs outstanding immediately after the offering

 

12,500,000 ADSs (or 14,375,000 ADSs if the underwriters exercise their option to purchase additional ADSs in full).

Ordinary shares outstanding immediately after the offering

 

439,196,670 ordinary shares (or 454,196,670 ordinary shares if the underwriters exercise their option to purchase additional ADSs in full).

NASDAQ Global Select Market symbol

 

SKYS

The ADSs

 

Each ADS represents eight ordinary shares, nominal value US$0.0001 per share.

 

 

The depositary will be the holder of the ordinary shares underlying the ADSs and you will have the rights of an ADS holder as provided in the deposit agreement among us, the depositary and owners and beneficial owners of ADSs from time to time.

 

 

You may surrender your ADSs to the depositary to withdraw the ordinary shares underlying your ADSs. The depositary will charge you a fee for such an exchange.

 

 

We may amend or terminate the deposit agreement without your consent. If an amendment becomes effective, you will be bound by the deposit agreement as amended if you continue to hold your ADSs.

 

 

To better understand the terms of the ADSs, you should carefully read the section in this prospectus entitled "Description of American Depositary Shares." We also encourage you to read the deposit agreement, which is an exhibit to the registration statement that includes this prospectus.

Depositary

 

Citibank, N.A.

 

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Use of proceeds   We estimate that we will receive net proceeds of approximately US$121.9 million (or US$141.1 million if the underwriters exercise their option to purchase additional ADSs in full) from this offering, assuming an initial public offering price of US$11.00 per ADS, the mid-point of the estimated range of the initial public offering price as set forth on the cover page of this prospectus, and after deducting the estimated underwriting discounts, commissions and estimated aggregate offering expenses payable by us. We intend to use the net proceeds we receive from this offering for the following purposes:

 

US$40.0 million for the construction of our shovel-ready projects in Japan;

 

US$40.0 million for the construction of our shovel-ready projects in Latin America such as Chile and Uruguay; and

 

US$10.0 million to develop our project pipeline in other regions.


 

 

We intend for the balance to be used for general corporate purposes, including working capital needs, potential strategic investments and other business opportunities.

 

 

See "Use of Proceeds" for additional information.

Reserved ADSs

 

At our request, the underwriters have reserved for sale, at the initial public offering price, up to 625,000 ADSs offered by this prospectus for sale to some of our directors, officers, employees, business associates and related persons. If these persons purchase reserved ADSs, this will reduce the number of ADSs available for sale to the general public. Any reserved ADSs that are not so purchased will be offered by the underwriters to the general public on the same terms as the other ADSs offered by this prospectus.

Risk factors

 

See "Risk Factors" and other information included in this prospectus for a discussion of the risks you should carefully consider before deciding to invest in our ADSs.

Lock-up

 

We, our directors, executive officers and existing shareholders (before and after giving effect to the Conversion and the Share Distribution) have agreed with the underwriters, subject to certain exceptions, not to sell, transfer or dispose of any of our ADSs, ordinary shares or similar securities for a period of 180 days after the date of this prospectus. See "Underwriting."

 

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Implications of Being an Emerging Growth Company

        As a company with less than US$1.0 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company's internal control over financial reporting.

        For as long as we remain an emerging growth company, we intend to take advantage of the exemptions discussed above. We will remain an emerging growth company until the earliest of (a) the last day of our fiscal year during which we have total annual gross revenue of at least US$1.0 billion; (b) the last day of our fiscal year following the fifth anniversary of the completion of this offering; (c) the date on which we have, during the previous three-year period, issued more than US$1.0 billion in non-convertible debt; or (d) the date on which we are deemed to be a "large accelerated filer" under the Securities Exchange Act of 1934, as amended, or the Exchange Act, which would occur if the market value of our ADSs that are held by non-affiliates exceeds US$700 million as of the last business day of our most recently completed second fiscal quarter. Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act.

 

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Summary Consolidated Financial and Operating Data

        The following summary consolidated statements of profit or loss and other comprehensive income (expense) data for the years ended December 31, 2011, 2012 and 2013, and the summary consolidated statements of financial position data as of December 31, 2011, 2012 and 2013 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our consolidated financial statements are prepared and presented in accordance with international financial reporting standards, or IFRS, issued by International Accounting Standards Board. The following summary condensed consolidated statements of profit or loss and other comprehensive income (expense) data for the six months ended June 30, 2013 and 2014, and the summary condensed consolidated statements of financial position data as of June 30, 2014 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus.

        You should read the summary consolidated financial data in conjunction with those financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. Our historical results do not necessarily indicate our results expected for any future periods.

Summary Consolidated Statements of Profit or Loss and other Comprehensive Income (Expense)

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (US$ in thousands)
 

Revenue

    83,127     203,757     36,457     23,758     14,422  

Related parties

    55,893     133,471     5,565     2,884     130  

Non-related parties

    27,235     70,286     30,893     20,874     14,292  

Cost of sales and services

    (59,148 )   (142,433 )   (29,270 )   (20,299 )   (8,288 )
                       

Gross profit

    23,979     61,324     7,187     3,459     6,135  

Impairment loss on IPP solar parks

            (21,645 )   (2,148 )   (1,280 )

Impairment loss on receivables

    (182 )   (629 )   (3,521 )        

Impairment loss on amounts due from other related parties

                    (2,200 )

Selling expenses

    (488 )   (635 )   (848 )   (467 )   (492 )

Administrative expenses

    (15,293 )   (24,007 )   (25,030 )   (14,686 )   (9,103 )

Other operating income

    1,574     789     484     135     1,443  
                       

Profit (loss) from operations

    9,590     36,842     (43,373 )   (13,706 )   (5,498 )

Investment income

    514     955     960     259     229  

Other gains and losses

    (770 )   (1,570 )   (3,488 )   (3,280 )   (534 )

Finance costs

    (138 )   (1,132 )   (2,352 )   (1,173 )   (1,342 )

Other expenses

        (1,600 )   (2,266 )   (734 )   (665 )

Share of losses of associates

    (114 )                
                       

Profit (loss) before taxation

    9,082     33,495     (50,519 )   (18,635 )   (7,810 )

Income tax expense

    (1,991 )   (6,630 )   (3,372 )   (1,214 )   (416 )
                       

Profit (loss) for the period

    7,091     26,865     (53,891 )   (19,849 )   (8,226 )
                       
                       

Other comprehensive income (expense) that may be subsequently reclassified to profit or loss:

                               

Exchange differences on translation of financial statements of foreign operations

    (2,878 )   1,031     (352 )   (1,004 )   392  
                       

Total comprehensive income (expense) for the period           

    4,213     27,896     (54,243 )   (20,853 )   (7,834 )
                       
                       

Earnings (loss) per share

                               

Basic

    0.02     0.08     (0.16 )   0.06     0.02  
                       
                       

Diluted

    0.02     0.08     (0.16 )   0.06     0.02  
                       
                       

 

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  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (US$ in thousands)
 

Earnings (loss) per ADS(1)

                               

Basic

    0.16     0.64     (1.28 )   0.48     0.16  
                       
                       

Diluted

    0.16     0.64     (1.28 )   0.48     0.16  
                       
                       

Other Financial Data:

                               

Adjusted EBITDA(2)

    17,896     47,024     (12,038 )   (11,821 )   784  

(1)
Each ADS represents eight ordinary shares.

(2)
See "—Adjusted EBITDA" below.

Revenue Breakdown

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2013   2014  
 
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  %
  (US$ in
thousands)

  %
 

Electricity sales income(1)

            4,515     2.2     8,020     22.0     2,429     10.2     11,838     82.1  

Solar energy system sales

    64,055     77.1     180,231     88.5     21,462     58.9     18,842     79.3     1,201     8.3  

Other(2)

    19,072     21.9     19,010     9.3     6,975     19.1     2,487     10.5     1,383     9.6  
                                           

Total revenue

    83,127     100.0     203,757     100.0     36,457     100.0     23,758     100.0     14,422     100.0  
                                           
                                           

(1)
Represents revenue from selling electricity from IPP solar parks.

(2)
Our other business consists of (i) O&M services and (ii) sales of solar modules.

Summary Consolidated Statements of Financial Position

 
  As of December 31,    
 
 
  As of June 30,
2014
 
 
  2011   2012   2013  
 
  (US$ in thousands)
   
 

Current assets

    237,881     238,691     122,861     76,580  

Non-current assets

    6,604     52,171     128,406     158,667  

IPP solar parks

        43,395     119,506     146,828  

Total assets

    244,485     290,862     251,267     235,247  

Current liabilities

    262,214     251,102     130,653     105,959  

Non-current liabilities

    2,515     23,382     22,509     27,807  

Total (deficit) equity

    (20,244 )   16,378     98,104     101,481  

Operating Data

 
  2011   2012   2013   Six Months
Ended
June 30,
2014
 

Solar parks connected during the period(1)(2) (MW)

    0.1     56.3     80.8     8.6  

Total IPP solar parks in operation at the end of the period(3) (MW)

        23.9     43.2     51.8  

(1)
We consider a solar park connected to the grid when it has achieved connection and has all approvals needed to begin selling electricity through the grid.

(2)
This represents total solar parks connected for both solar energy system sales and selling electricity as an IPP.

(3)
Total solar parks in operation include solar parks operated by us and our historical project affiliates under our IPP business model.

 

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Adjusted EBITDA

        To provide investors with additional information regarding our financial results, we have disclosed in this prospectus Adjusted EBITDA, a non-IFRS financial measure. We present this non-IFRS financial measure because it is used by our management to evaluate our operating performance. We also believe that this non-IFRS financial measure provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

        Adjusted EBITDA, as we present it, represents profit or loss for the period before taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, interest expenses, impairment loss and IPO expenses.

        The use of the Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our other IFRS-based financial performance measures, such as profit (loss) for the period and our other IFRS financial results. The following table presents a reconciliation of Adjusted EBITDA to profit (loss) for the period, the most directly comparable IFRS measure, for each of the periods indicated:

 
  As of and for the Year Ended
December 31,
  As of and for the
Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (US$ in thousands)
   
   
 

Profit (loss) for the period

    7,091     26,865     (53,891 )   (19,849 )   (8,225 )
                       

Adjustments:

                               

Income tax expense

    1,991     6,630     3,372     1,214     416  

Depreciation of property, plant and equipment

    331     305     283     209     346  

Depreciation of solar parks

        2,474     4,395     1,110     2,403  

Amortization

    35     100     101     60     86  

Share-based payment charged into profit or loss

    8,128     7,352     4,576     1,422     275  

Interest expenses

    138     1,132     2,352     1,173     1,342  

Impairment loss on IPP solar parks

            21,645     2,148     1,280  

Impairment loss on receivables

    182     629     3,521          

Impairment loss on amounts due from other related parties

                    2,200  

IPO expenses

        1,537     1,608     692     661  
                       

Adjusted EBITDA

    17,896     47,024     (12,038 )   (11,821 )   784  
                       
                       

        We do not consider historical Adjusted EBITDA to be representative of future Adjusted EBITDA, as our revenue model changed from primarily generating revenue from selling solar energy systems to primarily generating revenue from selling electricity in the fourth quarter of 2013. We believe that Adjusted EBITDA is an important measure for evaluating the results of our IPP business.

 

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RISK FACTORS

        An investment in our ADSs involves a high degree of risk. You should carefully consider the risks described below, together with all of the other information contained in this prospectus, before making an investment decision. Our business, financial condition and results of operations could be materially and adversely affected by any of the risks set forth herein, which could cause the trading price of our ADSs to decline and cause you to lose all or part of your investment. In assessing the risks described below, you should also refer to the other information contained in this prospectus, including our consolidated financial statements and the related notes thereto, before deciding to purchase any ADSs.

Risks Related to Our Business and Industry

The reduction, modification or elimination of government subsidies and economic incentives may reduce the economic benefits of our existing solar parks and our opportunities to develop or acquire suitable new solar parks.

        In many countries where we are currently or intend to become active, solar power markets, particularly the market of on-grid PV systems, would not be commercially viable without government subsidies or economic incentives. The cost of generating electricity from solar energy in these markets currently exceeds, and very likely will continue to exceed for the foreseeable future, the cost of generating electricity from conventional or some other non-solar renewable energy sources. These subsidies and incentives have been primarily in the form of FIT price support schemes, tax credits, net metering and other incentives to end users, distributors, system integrators and manufacturers of solar energy products.

        The availability and size of such subsidies and incentives depend, to a large extent, on political and policy developments relating to environmental concerns in a given country. Changes in policies could lead to a significant reduction in or a discontinuation of the support for renewable energies in such country. Government subsidies and incentives for solar energy were recently reduced in some countries and may be further reduced or eliminated in the future. For example, in 2010, the Czech Republic significantly reduced the amount of a subsidy to renewable energy off-takers. The expected future cash flows from a solar park developed by us in the Czech Republic therefore decreased and accordingly we impaired this asset in 2010. In December 2013, the Bulgarian National Assembly approved a proposal to introduce a 20% fee on revenue generated by PV and wind energy installations that benefitted from the FIT. The Constitutional Court of Bulgaria determined this fee was unconstitutional, and since August 2014 renewable energy producers are no longer required to pay this fee. In April 2014, the Greek government passed a law to reduce the FIT in effect on existing PPAs by roughly 30% and placed a discount on electricity sold in 2013. As a result, in relation to our Greek solar parks, we recognized an impairment loss of US$21.7 million in 2013 and US$1.3 million in the six months ended June 30, 2014. In Spain, a law was passed in December 2013 which is expected to change the fixed rate on the existing PPAs. While some of the reductions in government subsidies and economic incentives apply only to future solar parks, they could diminish the availability of our opportunities to continue to develop or acquire suitable newly developed solar parks. Some of these reductions may apply retroactively to existing solar parks, which could significantly reduce the economic benefits we receive from the existing solar parks. Moreover, some of the solar program subsidies and incentives expire or decline over time, are limited in total funding, require renewal from regulatory authorities or require us to meet certain investment or performance criteria. A significant reduction in the scope or discontinuation of government incentive programs in our target markets and globally could have a material adverse effect on our business, financial condition, results of operations and prospects.

We conduct our business operations globally and are subject to global and local risks related to economic, regulatory, social and political uncertainties.

        We conduct our business operations in a number of countries and, as of the date of this prospectus, have completed 181.0 MW of solar parks globally. We currently own and operate 53.9 MW of solar parks as an IPP. In addition, as of the date of this prospectus, we have 16.9 MW of solar parks under construction, 266.8 MW of shovel-ready projects and 1,054.7 MW of solar parks in pipeline in nine countries. Our business is therefore subject to diverse and constantly changing economic, regulatory, social and political conditions in the jurisdictions in which we operate.

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        Operating in the international marketplace exposes us to a number of risks globally and in each of the jurisdictions where we operate, including without limitation:

        For example, the European Union, the United States and other international economies have recently experienced a credit crisis and economic slowdown, resulting in decreases in the availability of financing for solar parks and decreases in investments in new installation of solar parks. Existing solar parks have also been delayed as a result of the credit crisis and other disruptions. If economic recovery is slow in the markets where we have operations, we may experience decreases in the demand for solar parks.

        As of the end of September 2014, five out of the ten general electricity utilities in Japan have announced plans to temporarily suspend reviews of proposals from solar energy producers, such as us, due to a foreseeable shortage in their available power transmission capacity in light of the popularity of the FIT program. The five utilities in question are Kyushu Electric Power, Shikoku Electric Power and Okinawa Electric Power, which operate in the west of Japan, and Hokkaido Electric Power and Tohoku Electric Power, which operate in the northeast. The remaining five utilities may have suspended reviews of proposals from solar energy producers as well, in the absence of announcements. While the announcements indicate that projects that have received permission to participate in the FIT program may not be affected, they also suggest that the power transmission capacity in parts of Japan may not be able to handle all of the solar energy projects that are currently foreseen, especially projects with large capacity. Even though our projects have relatively small capacities of between 500 kW and 2.5 MW, we may still experience delays in connecting our projects to the grid and our future expansion options under the FIT program may be materially and adversely affected. In addition, the Ministry of Economy, Trade and Industry, or METI, started considering reform measures on their solar energy policies. It is expected that these reform measures may be passed by the end of 2014. We expect that these policies would only apply to new projects and projects that have not obtained approval for connecting to the grid. Although we have approval for connecting to the grid for our shovel-ready projects and projects under construction in Japan, we have not obtained approval for connecting to the

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grid for our projects in pipeline. These reform measures are not expected to apply to projects that have already been connected to the grid. While there has been no final determination by METI to change their solar energy policy, certain reputable Japanese newspapers report that METI is currently reviewing the possibility of suspending new projects, reducing the FIT for future projects and encouraging other types of renewable energy (e.g. geothermal, wind) rather than solar energy.

        Moreover, as we enter new markets in different jurisdictions, we will face different regulatory regimes, business practices, governmental requirements and industry conditions. As a result, our prior experiences and knowledge in other jurisdictions may not be relevant, and we may spend substantial resources familiarizing ourselves with the new environment and conditions. To the extent that our business operations are affected by unexpected and adverse economic, regulatory, social and political conditions in the jurisdictions in which we have operations, we may experience project disruptions, loss of assets and personnel, and other indirect losses that could adversely affect our business, financial condition and results of operations.

Our growth prospects and future profitability depend to a significant extent on global liquidity and the availability of additional funding options with acceptable terms.

        We require a significant amount of cash to fund the installation and construction of our projects and other aspects of our operations. We may also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions we may decide to pursue in order to remain competitive. Historically, we have used bank loans and own equity contribution to fund our project development. We expect to expand our business with proceeds from this initial public offering and third-party financing options, including bank loans, equity partners, financial leases and securitization. However, we cannot guarantee that we will be successful in locating additional suitable sources of financing in the time periods required or at all, or on terms or at costs that we find attractive or acceptable, which may render it impossible for us to fully execute our growth plan. In addition, rising interest rates could adversely impact our ability to secure financing on favorable terms and our cost of capital. Further, our Japan silent partner may compel us to sell our assets to third parties, if such third parties provide a more attractive offer for the assets than we do. See "Business—Global Reach—Featured Countries—Japan—Japanese Silent Partnership."

        In early 2013, we began to strategically expand our IPP portfolio. Installing and constructing solar parks requires significant upfront capital expenditure and there may be a significant delay before we can recoup our investments through the long-term recurring revenue of our IPP solar parks. Our ability to obtain external financing is subject to a number of uncertainties, including:

        In addition, historical project affiliates in which we have held a minority interest have secured financing from financial institutions, where our affiliates' other equity owners have acted as financial guarantors. The ability of our affiliates to obtain financing depends on the ability of our affiliates' other equity owners to secure financing, provide acceptable guarantees for financing and comply with any applicable financial covenants. Due to our minority position, we may not be able to control the ability of the affiliate to comply with any applicable financial covenants or other obligations under the loan.

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See "—Disputes with our historical project affiliates' other equity owners may adversely affect our business."

        Any additional equity financing may be dilutive to our shareholders and any debt financing may require restrictive covenants. Additional funds may not be available on terms commercially acceptable to us. Failure to manage discretionary spending and raise additional capital or debt financing as required may adversely impact our ability to achieve our intended business objectives.

The delay between making significant upfront investments in our solar parks and receiving revenue could materially and adversely affect our liquidity, business and results of operations.

        There are generally many months or even years between our initial significant upfront investments in developing permits to build solar parks we expect to own and operate and when we commence to receive revenue from the sale of electricity generated by such solar parks after grid connection. Such investments include, without limitation, legal, accounting and other third-party fees, costs associated with feasibility study, payments for land rights, government permits, large transmission and PPA deposits or other payments, which may be non-refundable. Furthermore, we have historically relied on our own equity contribution and bank loans to pay for costs and expenses incurred during project development, especially to third parties for PV modules and balance-of-system components and EPC and O&M services. Solar parks typically generate revenue only after becoming commercially operational and starting to sell electricity to the power grid. There may be an especially long delay from initial land and interconnection assessments to projects becoming shovel-ready, especially when we obtain permits directly from regulators and site control rights directly from prior rights holders under our primary permit development model. Between our initial investments in the development of permits for solar parks and their connection to the transmission grid, there may be adverse developments to such solar parks. We consider parks "shovel ready" even if we have not obtained certain non-discretionary permits, so long as we comply with the relevant criteria. We have already begun the process for obtaining these permits and we normally expect to receive these permits within nine months from the date of commencing the process. In certain jurisdictions, such as Chile, we may be required to meet ongoing obligations in order to maintain our permits and continue to operate our plants. Furthermore, we may not be able to obtain all of the permits as anticipated, permits that were obtained may expire or become ineffective and we may not be able to obtain debt financing as anticipated. For example, for two of our advanced projects in Chile amounting to 57.2 MW, although we have already obtained the applicable land concessions (Concession de Uso Oneroso), we are currently involved in an administrative proceeding before the Ministry of National Assets (Ministerio de Bienes Nacionales) that could result in the revocation of those land concessions if the Ministry of National Assets determines that we have breached our obligations in maintaining the concessions. In addition, the timing gap between our upfront investments and actual generation of revenue, or any added delay in between due to unforeseen events, could put strains on our liquidity and resources, and materially and adversely affect our profitability and results of operations.

Our limited operating history, especially with large-scale IPP solar parks, may not serve as an adequate basis to judge our future prospects and results of operations.

        We began our business in 2009 and have a limited operating history. We started to develop our first solar park in 2009, and first began to operate solar parks in 2012 as an IPP. In 2011, 2012, 2013 and the six months ended June 30, 2014, we derived 77.1%, 88.5%, 58.9% and 8.3% of our total revenue from selling solar energy systems. In 2013, in order to internalize more value from project development and generate recurring revenue and cash flow, we began to focus on owning and operating solar parks as an IPP. As of June 30, 2014, we had a total of 51.8 MW of IPP solar parks in operation with a carrying value of US$109.1 million, including a total of 18.3 MW of IPP solar parks with a carrying value of US$35.8 million, which we initially constructed and sold to ChaoriSky Solar Energy S.a.r.l., or ChaoriSky Solar, but subsequently repurchased to settle outstanding receivables. In

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2012, 2013 and the six months ended June 30, 2014, we derived 2.2%, 22.0% and 82.1%, respectively, of our total revenue from electricity sales from our IPP solar parks. We may also from time to time acquire solar parks with attractive cash flow and yield profiles. Our historic track record of selling solar energy systems may not be a reliable indicator of our performance as an IPP. We intend to further expand our business operations in key markets such as Chile, Uruguay, Japan, Canada and South Africa.

        Our rapidly evolving business and, in particular, our relatively limited operating history as an IPP may not be an adequate basis for evaluating our business prospectus and financial performance, and makes it difficult to predict the future results of operations. Our past success occurred in an environment where capital was readily accessible to our clients and economic incentives were more favorable for PV power in certain markets, such as Greece and Bulgaria. Therefore, period-to-period comparisons of our operating results and our results of operations for any period should not be relied upon as an indication of our performance for any future period. In particular, our results of operations, financial condition, and future success depend, to a significant extent, on our ability to continue to identify suitable sites, obtain required regulatory approvals, arrange financing from various sources, construct solar parks in a cost-effective and timely manner, expand our project pipeline and manage and operate solar parks that we develop. If we cannot do so, we may not be able to expand our business at a profit or at all, maintain our competitive position, satisfy our contractual obligations, or sustain growth and profitability.

We may not be able to develop or acquire additional attractive IPP solar parks to grow our project portfolio.

        Our current business strategy includes plans to further grow our IPP assets, and own and operate substantially all the solar parks we develop. As part of our growth plan, we may acquire solar parks in various development stages through a competitive bidding process. We compete for project awards based on, among other things, pricing, technical and engineering expertise, financing capabilities, past experience and track record. It is difficult to predict whether and when we will be awarded a new solar park. The bidding and selection process is also affected by a number of factors, including factors which may be beyond our control, such as market conditions or government incentive programs. Our competitors may have greater financial resources, a more effective or established localized business presence or a greater willingness or ability to operate with little or no operating margins for sustained periods of time. Any increase in competition during the bidding process or reduction in our competitive capabilities could have a significant adverse impact on our market share and on the margins we generate from our solar parks.

        Other difficulties executing this growth strategy, particularly in new jurisdictions we may enter, include:

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We may not be able to find suitable sites for the development of IPP solar parks.

        Solar parks require solar and geological conditions that can only be found in a limited number of geographic areas. Further, large, utility-scale solar parks must be interconnected to the power grid in order to deliver electricity, which requires us to find suitable sites with capacity on the power grid available. Our competitors may impede our development efforts by acquiring control of all or a portion of a PV site we seek to develop. In addition, we acquire land with the understanding that such land may be rezoned for PV project development. However, rezoning has, at times, taken longer than expected or was not be possible. For example, we encountered difficulties registering certain leasehold interest, as a result of other land owners opposing the rezoning process. Although our operations were not materially affected by this delay, or the costs involved, future rezoning efforts may materially and adversely impact our business and results of operation. Even when we have identified a desirable site for solar park, our ability to obtain site control with respect to the site is subject to our ability to finance the transaction and growing competition from other solar power producers that may have better access to local government support, financial or other resources. If we were unable to find or obtain site control for suitable PV sites on commercially acceptable terms, our ability to develop new solar parks on a timely basis or at all might be harmed, which could have a material adverse effect on our business, financial condition and results of operations.

Our legal rights to certain real properties used for our solar parks are subject to third party rights and may be challenged by property owners or third parties.

        Our rights to the properties used for our solar parks may be challenged by property owners and other third parties. For example, in Chile, where there can be multiple overlapping mining claims with respect to the same property, a third-party electric company holds mining concessions with a higher priority than ours over two hectares of the 127 hectares underlying one of our projects. In addition, that company and other entities, including other electric companies, hold higher priority mining concessions than ours over approximately 11 kilometers of the 12 kilometer easement that we have secured for the construction of the transmission line for that project, which runs alongside an existing transmission line. As a result, we may have to negotiate with these companies in order to avoid future challenges to our rights to construct and operate this project. In the event of a claim by a third party holding higher priority mining concessions than ours asserting a bona fide intent to engage in mining activities in a project area, a court could enjoin our ability to construct a solar park there until the dispute is resolved. An adverse decision from a court or the absence of an agreement with such third-parties may result in additional costs and delays in the construction and operating phases of any solar park so situated. In addition, certain real properties used for our solar parks in the Czech Republic and Spain were mortgaged to third parties by the relevant landlords to secure other debts before we obtained our rights with respect to such properties and, as a result, our rights are subject to the mortgages. In the event of failure by the relevant debtor to comply with its payment obligations, the mortgagee will be entitled to sell the properties and the mortgagee or the purchaser of such properties will have no obligation to respect our rights to the properties and will be entitled to terminate our rights without any compensation. In such case, we may lose our rights to the affected solar parks. While we may ask the debtor or the property owner to compensate us, we cannot assure you that they will agree or have the financial resources to do so or that the compensation will be sufficient to cover all of our losses. In addition, some properties used for our solar parks are subject to other third-party rights such as right of passage and right to place cables and other equipment on the properties, which may result in certain interferences with our use of the properties. Our rights to the properties used for our solar parks may be challenged by property owners and other third parties for various other reasons

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as well. For example, we do not always have the exclusive right to use a given site. Any such challenge, if successful, could impair the development or operations of our solar parks on such properties. We are also subject to the risk of potential disputes with property owners or third parties who otherwise have rights to or interests in the properties used for our solar parks. Such disputes, whether resolved in our favor or not, may divert management's attention, harm our reputation or otherwise disrupt our business.

Failure to manage our growing and changing business could have a material adverse effect on our business, prospects, financial condition and results of operations.

        We intend to expand our business significantly within selected existing markets and in a number of new locations in the future. We also intend to significantly increase the proportion of solar parks we develop as IPP solar parks in the future. As we grow, we expect to encounter additional challenges to our internal processes, external construction management, capital commitment process, project funding infrastructure and financing capabilities. Our existing operations, personnel, systems and internal control may not be adequate to support our growth and expansion and may require us to make additional unanticipated investments in our infrastructure. In addition, our experience developing, building and selling solar energy systems may not be applicable to our IPP solar parks, since IPP solar parks require enhanced financing and O&M capabilities. To manage the future growth of our operations, we will be required to improve our administrative, operational and financial systems, procedures and controls, and maintain, expand, train and manage our growing employee base. We will need to hire and train project development personnel to expand and manage our project development efforts. If we are unable to manage our growth effectively, we may not be able to take advantage of market opportunities, execute our business strategies successfully or respond to competitive pressures. As a result, our business, prospects, financial condition and results of operations could be materially and adversely affected.

Our future success depends significantly on the continued service of our senior management team and our ability to attract, train and retain qualified personnel.

        The industry experience, expertise and contributions of our executive chairman, Mr. Weili Su are essential to our continuing success. We will continue to rely on the contributions of our senior management, regional management and other key employees to implement our growth plans. If we were to lose the services of any of our senior and regional management members and were unable to train or recruit and retain personnel with comparable qualifications, the management and growth of our business could be adversely affected.

        Our success is largely attributable to the qualified and experienced project development teams that we have been able to train, attract and retain in the past. We may not be able to continue to train, attract and retain high quality personnel, including executive officers, project development personnel, project management personnel and other key qualified personnel who have the necessary and required experience and expertise. In particular, as we enter new markets in different jurisdictions, we always face challenges to find and retain qualified local personnel who are familiar with local regulatory regimes and adequately experienced in project development and operations.

        There is substantial competition for qualified personnel in the downstream PV industry. Our competitors may be able to offer more competitive packages, or otherwise attract our personnel. Our costs to retain qualified personnel may also increase in response to competition. If we fail to attract and retain personnel with suitable managerial, technical or marketing expertise or maintain an adequate labor force on a continuous basis, our business operations could be adversely affected and our future growth and expansions may be inhibited.

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Our international operations require significant management resources and present legal, compliance and execution risks in multiple jurisdictions.

        We have adopted a global business model under which we maintain significant operations and facilities through our subsidiaries located in Europe, South America, North America and Asia, while our corporate management team and directors are primarily based in Hong Kong and Shanghai. Although we have appointed managing directors who oversee Europe, Latin America, East Asia and North America, the global nature of our business may stretch our management resources as well as make it difficult for our corporate management to effectively monitor local execution teams. The global nature of our operations and limited resources of our management may create risks and uncertainties when executing our strategy and conducting operations in multiple jurisdictions, which could affect our costs and results of operations.

Decreases in the spot market price of electricity could harm our IPP revenue and reduce the competitiveness of solar parks in grid-parity markets.

        The electricity prices for solar parks are either fixed through long-term PPAs or are variable and determined by the spot market. Although the price of electricity as of June 30, 2014 was fixed through PPAs for 98.2% of our owned capacity, in countries where the price of electricity is sufficiently high that solar parks can be profitably developed without the need for government price supports, a condition known as "grid-parity", solar parks may choose not to enter into PPAs and sell based on the spot market price of electricity. We intend to build IPP solar parks in Chile, a market that reached grid parity in 2011, and we expect that the price of electricity purchased by such solar parks will fluctuate with Chile's spot electricity prices. Revenue for solar parks in other markets will also fluctuate with the electricity spot market after the expiration of any PPA, unless renewed. The market price of electricity can be subject to significant fluctuations and can be affected by drivers such as the cost of traditional fossil fuels used for electricity generation, the discovery of new fossil fuel sources, additional electricity generation capacity, additional electric transmission and distribution lines, technological or regulatory changes, increased energy conservation or for a number of other reasons.

        Decreases in the spot price of electricity in such countries would render PV energy less competitive compared to other forms of electricity. For example, PV may no longer be in grid parity if the price of fossil fuels used for electricity generation decreased sufficiently. In this situation, our solar parks may no longer be profitable in that market and we may not be able to recoup the time and effort invested in applying for permits or developing solar parks. A reduction in electricity prices would render our solar parks less economically attractive. If the retail price of energy were to decrease due to any of these reasons, or others, our business and results of operations may be materially and adversely affected.

If sufficient demand for solar parks does not develop or takes longer to develop than we anticipate, our business, financial condition, results of operations and prospects could be materially and adversely affected.

        The PV market is at a relatively early stage of development in many of the markets that we have entered or intend to enter. The PV industry continues to experience lower costs, improved efficiency and higher electricity output. However, trends in the PV industry are based only on limited data and may not be reliable. Many factors may affect the demand for solar parks, including:

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        If market demand for solar parks fails to develop sufficiently, our business, financial condition, results of operations and prospects could be materially and adversely affected.

We face significant competition in certain markets in which we operate.

        We face significant competition in certain markets in which we operate. Our primary competitors are local and international developers and operators of solar parks, many of which are integrated with upstream PV manufacturers. We also compete with utilities generating power from conventional fossil fuels and other sources of renewable energy in regions that have achieved grid parity, such as Chile. As we further expand into the downstream markets, we will face increasing competition from these companies.

        Some of our competitors may have advantages over us in terms of greater operational, financial, technical, management or other resources in particular markets or in general. Our market position depends on our financing, development and operation capabilities, reputation, experience and track record. Our competitors may also enter into strategic alliances or form affiliates with other competitors to our detriment. Suppliers or contractors may merge with our competitors which may limit our choices of contractors and hence the flexibility of our overall project execution capabilities. There can be no assurance that our current or potential competitors will not offer solar parks or services comparable or superior to those that we offer at the same or lower prices or adapt more quickly than we do. Increased competition may result in price reductions, reduced profit margins and loss of market share.

We are subject to risks associated with fluctuations in the prices of PV modules and balance-of-system components or in the costs of design, construction and labor.

        We procure supplies for solar parks construction, such as PV modules and balance-of-system components, from third-party suppliers. We typically enter into contracts with our suppliers and contractors on a project-by-project basis or a project portfolio basis. We generally do not maintain long-term contracts with our suppliers. Although some of our EPC contracts allow us to reclaim additional costs incurred as a result of unexpected increases in procurement costs, we are still exposed to fluctuations in prices for our PV modules and balance-of-system components. Increases in the prices of PV products or balance-of-system components or fluctuations in design, construction, labor and installation costs may increase the cost of procuring equipment and engaging contractors and hence materially and adversely affect our results of operations.

PV project development is challenging and may ultimately not be successful, which can have a material adverse effect on our business, financial condition and results of operations.

        The development and construction of solar parks involve numerous risks and uncertainties and requires extensive research, planning and due diligence. We may be required to incur significant amounts of capital expenditure for land and interconnection rights, preliminary engineering, permitting, legal and other expenses before we can determine whether a solar park is economically, technologically

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or otherwise feasible. Success in developing a particular solar park is contingent upon, among other things:

        Successful completion of a particular solar park may be adversely affected by numerous factors, including without limitation:

        Accordingly, some of the solar parks in our pipeline may not be completed or even proceed to construction. If a number of solar parks are not completed, our business, financial condition and results of operations could be materially and adversely affected.

Our construction activities may be subject to cost overruns or delays.

        Construction of our solar parks may be adversely affected by circumstances outside of our control, including inclement weather, a failure to receive regulatory approvals on schedule or third-party delays in providing PV modules, inverters or other materials. Obtaining full permits for our solar parks is time consuming and we may not be able to meet our expected timetable for obtaining full permits for our solar parks in the pipeline. We may not be able to negotiate satisfactory engineering, procurement and construction agreements with third parties. Changes in project plans or designs, or defective or late execution may increase our costs and cause delays. Increases in the prices of PV products and balance-of-system components may increase procurement costs. Labor shortages, work stoppages or labor disputes could significantly delay a project or otherwise increase our costs. In addition, delays in

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obtaining or our inability to obtain required construction permits could also delay or hinder the construction of our solar parks. A lack of proper construction permits or post-construction approvals could delay or prevent us from commencing operation and connecting to the relevant grid.

        Moreover, we rely on a limited number of third-party suppliers for certain components and equipment used in the construction of our solar parks, such as PV modules. The failure of a supplier to supply components and equipment in a timely manner, or at all, or to supply components and equipment that meet our quality, quantity and cost requirements, could impair our ability to install solar parks or may increase our costs. To the extent the processes that our suppliers use to manufacture components are proprietary, we may be unable to obtain comparable components from alternative suppliers.

        In addition, we typically utilize and rely on third-party contractors to construct and install our solar parks. If our contractors do not satisfy their obligations or do not perform work that meets our quality standards or if there is a shortage of third-party contractors or if there are labor strikes that interfere with the ability of our employees or contractors to complete their work on time or within budget, we could experience significant delays or cost overruns.

        We may not be able to recover any of these losses in connection with construction cost overruns or delays. In addition, if we are unable to connect a solar park to the power grid on schedule, we may experience lower FIT, as FIT regimes generally ratchet down the FIT awarded to solar parks that connect later to the power grid. Certain PPAs require that we connect to the transmission grid by a certain date. If the solar park is significantly delayed, we may forfeit the PPA and we may only be able to obtain reduced FIT payments or may even become ineligible for FIT payments. A reduction or forfeiture of FIT payments would materially and adversely affect the financial results and results of operations for that solar park. Any of the contingencies discussed above could lead us to fail to generate our expected return from our solar parks and result in unanticipated and significant revenue and earnings losses.

We may be subject to unforeseen costs, liabilities or obligations when operating and maintaining solar parks.

        We operate and maintain the solar parks in our IPP portfolio. In addition, we have entered into separate contractual agreements to operate and maintain substantially all of the solar parks built by us. Pursuant to these agreements, we generally perform scheduled and unscheduled maintenance and operating and other asset management services. We subcontract certain on-the-ground O&M services, including security and repair, to third-parties, who may not perform their services adequately.

        If we or our third-party contractors fail to properly operate and maintain the solar parks, the solar parks may experience decreased performance, reduced useful life or shut downs. Through changes in our own operation or in local conditions, the costs of operating the project may increase, including costs related to labor, equipment, insurance and taxes. If they are careless or negligent, resulting in damage to third parties, we may become liable for the consequences of any resulting damage. We may also experience equipment malfunction or failure, leading to unexpected maintenance needs, unplanned outages or other operational issues. In addition, inconsistencies in the quality of solar panels, PV modules, balance-of-system components or maintenance services for our solar parks may affect the system efficiency of our solar parks. We may also encounter difficulties selling electricity to the power grid due to failures in infrastructure or transmission systems. To the extent that any of the foregoing affects our ability to sell electricity to the power grid, or we incur increased costs in relation to operating and maintaining solar parks, our business, financial condition and results of operation could be materially and adversely affected.

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Our project operations may be adversely affected by weather and climate conditions, natural disasters and adverse work environments.

        Solar parks depend on the amount and intensity of sunlight, which is affected by weather and climate conditions. Any change of such conditions in the areas we operate that reduces solar radiation will adversely affect our business and results of operations. In addition, we may operate in areas that are under the threat of floods, earthquakes, landslides, mudslides, sandstorms, drought, or other inclement weather and climate conditions or natural disasters. If inclement weather or climatic conditions or natural disasters occur in areas where our solar parks and project teams are located, project development, connectivity to the power grid and the provision of O&M services may be adversely affected. In particular, materials may not be delivered as scheduled and labor may not be available. As many of our solar parks are located in the same region, such solar parks may be simultaneously affected by weather and climate conditions, natural disasters and adverse work environments.

        During periods of curtailed activity, we may continue to incur operating expenses. We may bear some or all of the losses associated with such unforeseen events. Moreover, natural disasters which are beyond our control may adversely affect the economy, infrastructure and communities in the countries and regions where we conduct our business operations. Such conditions may result in personal injuries or fatalities or have an adverse effect on our work performance, progress and efficiency or even result in personal injuries or fatalities.

We are subject to counterparty risks under our FIT price support schemes and PPAs.

        As an IPP, we generate electricity income primarily pursuant to FIT price support schemes or PPAs, which subjects us to counterparty risks with respect to electric utilities and regulatory regimes. Our FIT price support schemes and PPAs in one region or country are generally signed with a limited number of electric utilities. We rely on these electric utilities to fulfill their responsibilities for the full and timely payment of our tariffs. In addition, the relevant regulatory authorities may retroactively alter their FIT price support regimes in light of changing economic circumstances, changing industry conditions or for any number of other reasons. For example, the Greek government passed a law in April 2014 reducing FIT currently in effect in existing contracts by roughly 30%, while imposing a discount on electricity already sold in 2013. In December 2013, the Bulgarian government imposed a 20% fee on revenue generated from PV and wind energy installations. Subsequently, the Constitutional Court of Bulgaria determined the fee to be unconstitutional, and renewable energy producers are no longer required to pay this fee. A law in Spain passed in December 2013 is expected to change the fixed rate on existing PPAs. If the relevant government authorities or the local power grid companies do not perform their obligations under the FIT price support schemes and PPAs and we are unable to enforce our contractual rights, our results of operations and financial condition may be materially and adversely affected.

Disputes with our historical project affiliates' other equity owners may adversely affect our business.

        We do not have control over the management and strategy with respect to solar parks held by the historical project affiliates in which we hold less than 50% equity interests. See "Business—Our Historical Project Affiliates."

        Our ability to direct the actions of or influence the decisions in relation to these affiliates or the solar parks held by them is dependent on a number of factors, including reaching agreement with other stakeholders with respect to certain decisions, our rights and obligations under the relevant stakeholders' agreements and the decision-making process by the board of directors or other governing bodies.

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        We may not successfully engage business partners that are reliable and capable. In addition, in the course of cooperation, our business partners may:

        In particular, under the current contractual arrangements, if our affiliates' other equity owners decide to secure permits, EPC or O&M services from other parties or otherwise take any action that may not be in our best interest or fail to perform their respective obligations or otherwise breach the terms and conditions of the governing agreements, it could have an adverse effect on our business, financial condition and results of operations. In addition, a dispute may arise with our current or future affiliate's other equity owners and cause the loss of business opportunities or disruption to or termination of the relevant solar parks. Such dispute may also give rise to litigation or other legal proceedings, which will divert our management attention and other resources. In the event that we encounter any of the foregoing problems, our business, financial condition and results of operations may be materially and adversely affected.

We have relied on our historical project affiliates to generate a significant portion of our revenue.

        A substantial portion of our total revenue in 2011, 2012 and 2013 was derived from our historical project affiliates we formed for PV project co-investment. For example, our largest client during 2011, 2012 and 2013, ChaoriSky Solar, an affiliate which we formed with a module manufacturer and in which we had held a 30% equity interest until November 2013, accounted for 35.2%, 42.8% and 9.2% of our total revenue in the respective periods. RisenSky Solar Energy S.a.r.l., or RisenSky, an affiliate, accounted for 32.0%, 2.7%, 1.5% and 0.9% our total revenue in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. China New Era International Limited, an affiliate, accounted for nil, 22.6%, 9.5% and nil of our total revenue in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. See "Business—Our Historical Project Affiliates" and "Related Party Transactions—Transactions with Certain Affiliates and Shareholders." As of the date of this prospectus, we no longer hold an interest in ChaoriSky Solar and continue to hold a 30% interest in RisenSky and Sky Solar Holdings Co., Ltd., formerly a shareholder of our company, holds a 49% interest in China New Era International Limited. We do not anticipate engaging ChaoriSky Solar or its parent company in any business going forward. While we expect to become less dependent on our affiliates in the future, as we continue to transition to more of an IPP business model, we may continue to leverage the financial resources and project development expertise of our affiliates' other equity owners. The financial health, creditworthiness and business performance of our affiliates would therefore continue to have a material effect on our results of operations.

Our transactions with our historical project affiliates may not be on an arm's length basis.

        We have historically leveraged our historical project affiliates as vehicles to expand our business overseas through delivering our permit development capabilities, EPC services and O&M services to them. We have entered, and expect to continue to enter, into various transactions including sale of primary development rights and provision of EPC services with these affiliates, which have contributed to a significant portion of our revenue. See "Business—Our Historical Project Affiliates." These affiliates were formed with the intention that our affiliates' other equity owners who are module manufacturers, such as Chaori and Risen, provide their modules to such affiliates and that we provide our permits and EPC services to the affiliate. There can be no assurance that independent parties negotiating at arm's length would have arrived at the same terms. Since we hold substantial interest in these affiliates and therefore have significant influence over these affiliates, there is a risk that any

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decisions or actions taken by either our affiliates or us in these transactions (including with respect to pricing, amendments, disputes or enforcement proceedings) may not be the same if we operated on an arm's length basis.

Our result of operations may be subject to fluctuations.

        Historically, we primarily generated revenue from selling permits, providing EPC services and selling commercially operational solar parks. In a given period, our revenue was affected by the limited number of solar parks that are under development and sold to third parties, and therefore subject to significant fluctuations. Although we intend to focus on developing IPP solar parks, we will continue to develop, build and sell solar energy systems from time to time to take advantage of attractive market opportunities. As a result, we may generate more of our revenues from the one-time sale of solar parks for certain periods. Moreover, certain aspects of our IPP business will also be subject to seasonal variations. For example, certain economic incentive programs, such as FIT regimes, generally include mechanisms that ratcheted down the incentives over time in line with the general trend of decreasing system costs of solar parks. As a result, we may schedule significant construction activities to connect solar parks to the power grids prior to scheduled decreases in FIT rates, which vary from country to country, in order to qualify for more favorable FIT policies.

        To the extent that we continue to develop, build and sell solar energy systems, we may be exposed to similar risks going forward.

We may incur warranty expenses in connection with the solar energy systems we have sold.

        We provide two to five year warranties to the clients of our EPC services and purchasers of our solar parks. Although we generally obtain warranties from our equipment suppliers, we may be responsible for claims during the warranty period with respect to defects in our EPC services and solar parks sold. We are required to remove such defects generally within 48 hours after the defects occur, and to bear all the costs associated with our repair work. Our expenses for repairs have historically not been material. If significant defects arise from our EPC services or solar parks sold to clients, we may suffer adverse impacts on our financial condition and business.

We may fail to comply with laws and regulations in the countries where we develop, construct and
operate solar parks.

        The development, construction and operation of solar parks are highly regulated activities. We conduct our operations in many countries and jurisdictions and are governed by different laws and regulations, including national and local regulations relating to building codes, taxes, safety, environmental protection, utility interconnection and metering and other matters. We also set up subsidiaries in these countries and jurisdictions which are required to comply with various local laws and regulations. While we strive to work with our local counsels and other advisers to comply with the laws and regulations of each jurisdiction in which we have operations, there have been, and continue to be, instances of noncompliances such as late filings of annual accounts with the appropriate governmental authorities, failure to notify governmental authorities of certain transactions, failure to hold annual meetings as required, failure to register directors or office changes or other local requirements which may result in fines, sanctions and other penalties against the non-complying subsidiaries and its directors and officers. While we do not believe our past and continuing non-compliances, singularly or in the aggregate, will have a material adverse effect on our business, financial condition or results of operation, we cannot assure you that similar or other non-compliances will not occur in the future which may materially and adversely affect our business, financial condition or results of operation.

        In order to develop solar parks we must obtain a variety of approvals, permits and licenses from various authorities. The procedures for obtaining such approvals, permits and licenses vary from country to country, making it onerous and costly to track the requirements of individual localities and

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comply with the varying standards. Failure to obtain the required approvals, permits or licenses or to comply with the conditions associated therewith could result in fines, sanctions, suspension, revocation or non-renewal of approvals, permits or licenses, or even criminal penalties, which could have a material adverse effect on our business, financial condition and results of operations. For example, for two of our advanced projects in Chile amounting to 57.2 MW, although we have already obtained the applicable land concessions (Concession de Uso Oneroso), we are currently involved in an administrative proceeding before the Ministry of National Assets (Ministerio de Bienes Nacionales) that could result in the revocation of those land concessions if the Ministry of National Assets determines that we have breached our obligations in maintaining the concessions.

        Any new government regulations pertaining to our business or solar parks may result in significant additional expenses. We cannot assure you that we will be able to promptly and adequately respond to changes of laws and regulations in various jurisdictions, or that our employees and contractors will act in accordance with our internal policies and procedures. Failure to comply with laws and regulations where we develop, construct and operate solar parks may materially and adversely affect our business, results of operations and financial condition.

We may become regulated as a utility company in certain jurisdictions in the future.

        We currently are not subject to regulation as a utility company in any jurisdiction. Our business strategy includes significant expansion into downstream markets as an IPP. Operation of these solar parks and sales of electricity from such solar parks could change our regulatory position in certain jurisdictions in the future. Utility companies are typically subject to complex regulations at the local, state or national level in various jurisdictions, and these regulations could place significant restrictions on our ability to operate our business and execute our business plan by prohibiting or otherwise restricting our sale of electricity. See "Regulations." If we were subject to regulation as a utility company, our operating costs could materially increase.

If we fail to comply with financial and other covenants under our loan agreements, our financial condition, results of operations and business prospects may be materially and adversely affected.

        We enter into loan agreements containing financial and other covenants that require us to maintain certain financial ratios or impose certain restrictions on disposition of our assets or the conduct of our business. While we are currently in compliance with all financial and other covenants, we may not be able to comply with some of those financial and other covenants from time to time. In addition, we typically pledge over our solar park assets or account or trade receivables to raise debt financing, and we are restricted from creating additional security over our assets. Such account or trade receivables will include all income generated from the sale of electricity in the solar parks. If we are in breach of one or more financial or other covenants or negative pledges clause under any of our loan agreements and are not able to obtain waivers from the lenders or prepay such loan, such breach would constitute an event of default under the loan agreement. As a result, repayment of the indebtedness under the relevant loan agreement may be accelerated, which may in turn require us to repay the entire principal amount including interest accrued, if any, of certain of our other existing indebtedness prior to their maturity under cross-default provisions of other loan agreements. If we are required to repay a significant portion or all of our existing indebtedness prior to their maturity, we may lack sufficient financial resources to do so. In that case, the pledgees may auction or sell the assets or interest of our solar parks to enforce their rights under the pledge contracts and loan agreements. Furthermore, a breach of those financial and other covenants will also restrict our ability to pay dividends. Any of those events could have a material adverse effect on our financial condition, results of operations and business prospects.

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Our substantial indebtedness could adversely affect our business, financial condition and results of operations.

        We require a significant amount of cash to meet our capital requirements and fund our operations, including payments to suppliers for PV modules and balance-of-system components and to contractors for design, engineering, procurement and construction services. We believe our substantial indebtedness will increase as an IPP. As of June 30, 2014, we had US$46.1 million in outstanding short-term borrowings (including the current portion of long-term bank borrowings) and US$20.9 million in outstanding long-term bank borrowings (excluding the current portion).

        Our debt could have significant consequences on our operations, including:

        Any of these factors and other consequences that may result from our substantial indebtedness could have an adverse effect on our business, financial condition and results of operations as well as our ability to meet our payment obligations under our debt. Our ability to meet our payment obligations under our outstanding debt depends on our ability to generate significant cash flow in the future. This, to some extent, is subject to general economic, financial, competitive, legislative and regulatory factors as well as other factors that are beyond our control.

Our IPP business requires significant financial resources. If we do not successfully execute our financing plan, we may have to sell certain of our IPP solar parks or risk not being able to continue as a going concern.

        As of December 31, 2011, 2012, 2013 and June 30, 2014, our current liabilities exceeded our current assets by US$24.3 million, US$12.4 million, US$7.8 million and US$29.4 million, respectively. In addition, in 2012 and 2013, we incurred negative cash flow from operations of US$34.4 million and US$28.6 million, respectively and incurred net loss of US$53.9 million in 2013. For the six months ended June 30, 2014, we had positive cash flow from operations of US$17.7 million, but incurred a net loss of US$8.2 million. Our principal sources of liquidity to date have been cash from our operations and borrowings from banks and our shareholders. We leverage bank facilities in certain countries in order to meet working capital requirements for construction activities. Our principal uses of cash have been for pipeline development, working capital and general corporate purposes.

        We are in need of additional funding to sustain our business as a going concern, and we have formulated a plan to address our liquidity problem. Our management reviews our forecasted cash flows on an on-going basis to ensure that we will have sufficient capital from a combination of internally generated cash flows and proceeds from financing activities, if required, in order to fund our working capital and capital expenditures. We have historically been able to effectively manage our business with a working capital deficit based on our arrangements with suppliers who typically do not require payment until such time as IPP solar parks are completed, at which point we are able to either sell the parks, or obtain collateralized financing. In addition, subsequent to December 31, 2013, we have taken actions in order to increase our working capital. Specifically, we have entered into enforceable agreements with Sky Solar (Hong Kong) International Co., Ltd., Sky Solar New Energy Investment Limited and Beijing Sky Solar Investment Management Co., Ltd., all of which are our related parties and have undertaken not to demand repayment of debts owed by us with aggregate carrying amount of US$21.3 million, until no earlier than April 10, 2015. Sky Solar New Energy Investment Limited and Beijing Sky Solar Investment Management Co., Ltd. have also undertaken to maintain our working capital at a minimum of US$42 million, either through directly making an advance to us or guaranteeing our borrowings from a reputable bank or financial institution until December 31, 2015. Based on the above factors, we believe that adequate sources of liquidity will exist to fund our working capital and capital expenditures, and to meet our short term debt obligations, other liabilities and commitments as they become due.

        We cannot assure you that we will successfully execute our financing plan. If we do not successfully execute this plan, we may not be able to continue as a going concern. Such failure could materially and adversely affect our financial condition, results of operations and business prospects.

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If we fail to implement and maintain an effective system of internal controls, we may be unable to accurately report our results of operations or prevent fraud or fail to meet our reporting obligations and investor confidence and the market price of our ADSs may be materially and adversely affected.

        Prior to this offering, we were a private company with limited accounting personnel and other resources with which to address our internal controls and procedures. However, upon completion of this offering, we will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that we include a report of management on our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2015. In addition, once we cease to be an "emerging growth company" as such term is defined in the JOBS Act, our independent registered public accounting firm may need to report on the effectiveness of our internal control over financial reporting. Our management may conclude that our internal control over financial reporting is not effective. Moreover, even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with our internal controls or the level at which our controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from us. In addition, after we become a public company, our reporting obligations may place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We may be unable to timely complete our evaluation testing and any required remediation.

        If we fail to maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, we may not be able to conclude on an ongoing basis that we have effective internal control over financial reporting in accordance with Section 404. If we fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations and lead to a decline in the trading price of our ADSs. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions. We may also be required to restate our financial statements from prior periods.

In the course of preparing our consolidated financial statements, we have identified a material weakness and other control deficiencies in our internal control over financial reporting, which, as of the date of this prospectus, have not been remediated. If we fail to achieve an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud and investor confidence in our company and the market price of the ADSs may be adversely affected.

        We will be subject to reporting obligations under the U.S. securities laws after this offering. Our reporting obligations as a public company with operations across multiple jurisdictions on five continents will place a significant strain on our management, operational and financial resources and systems for the foreseeable future. Prior to this offering, we have been a private company and have had limited accounting personnel and other resources with which to address our internal control over financial reporting. In connection with the preparation and external audit of our consolidated financial statements, we and our independent registered public accounting firm identified a material weakness, certain significant deficiencies and other control deficiencies, each as defined in the U.S. Public Company Accounting Oversight Board Standard AU Section 325, Communications About Control Deficiencies in an Audit of Financial Statements, or AU325, in our internal control over financial reporting as of December 31, 2013. As defined in AU325, a "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not

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be prevented or detected on a timely basis. The material weakness identified relates to insufficient accounting resources and processes necessary to comply with reporting and compliance requirements of the IFRS and Securities and Exchange Commission, or SEC. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses, certain significant deficiencies and other control deficiencies in our internal control over financial reporting as we and they will be required to do once we become a public company. In light of the material weakness, certain significant deficiencies and other control deficiencies that were identified as a result of the limited procedures performed, we believe it is possible that, had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.

        We plan to take various measures to remediate the weakness and deficiencies. However, these measures may not fully address the material weakness and other control deficiencies in our internal control over financial reporting. Our failure to correct the material weakness, certain significant deficiencies and other control deficiencies or our failure to discover and address any other control deficiencies that could result in inaccuracies in our financial statements and could also impair our ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, our business, financial condition, results of operations and prospects, as well as the trading price of our ADSs, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting may significantly hinder our ability to prevent fraud.

        Upon completion of this offering, we will become subject to the Sarbanes-Oxley Act of 2002, as amended, subject to exemptions we qualify for under the JOBS Act. Section 404 of the Sarbanes-Oxley Act will require that we include a report from management on the effectiveness of our internal control over financial reporting in our annual report on Form 20-F beginning with our annual report for the fiscal year ending December 31, 2015. In addition, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting beginning with our annual report on Form 20-F following the date on which we cease to qualify as an "emerging growth company," as such term is defined in the JOBS Act, which may be up to five full fiscal years following the date of this offering. If we fail to remediate the problems identified above, our management and our independent registered public accounting firm may conclude that our internal control over financial reporting is not effective. This conclusion could adversely impact the market price of the ADSs due to a loss of investor confidence in the reliability of our reporting processes. We also expect to incur additional costs and expenses associated with our becoming a public company, including costs to prepare for our first Sarbanes-Oxley Act of 2002 Section 404 compliance testing and additional legal and accounting costs to comply with the requirements of the Exchange Act that will apply to us as a public company.

We may become involved in costly and time-consuming litigation and other regulatory proceedings, which require significant attention from our management.

        Although we are not involved in any significant litigation, administrative or arbitral proceedings, we may, in the ordinary course of our business, become involved in such proceedings. Claims may be brought against or by us from time to time regarding, for example, defective or incomplete work, defective products, personal injuries or deaths, damage to or destruction of property, breach of warranty, late completion of work, delayed payments, intellectual property rights or regulatory compliance, and may subject us to litigation, arbitration and other legal proceedings, which may be expensive, lengthy, disruptive to normal business operations and require significant attention from our management. For example, although we are not involved in the litigation, in December 2013, the Bulgarian National Assembly approved a proposal to introduce a 20% fee on revenue generated by PV and wind energy installations that benefitted from the FIT. The Constitutional Court of Bulgaria

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determined this fee was unconstitutional and, since August 2014, renewable energy producers are no longer required to pay this fee.

        If we were found to be liable on any of the claims against us, we would incur a charge against earnings to the extent a reserve had not been established for coverage. If amounts ultimately realized from the claims by us were materially lower than the balances included in our financial statements, we would incur a charge against earnings to the extent profit had already been accrued. Charges and write-downs associated with such legal proceedings could have a material adverse effect on our financial condition, results of operations and cash flow. Moreover, legal proceedings, particularly those resulting in judgments or findings against us, may harm our reputation and competitiveness in the market.

We face uncertainties with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

        Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises, or SAT Circular 698, issued by the State Administration of Taxation, or the SAT, on December 10, 2009 with retroactive effect from January 1, 2008, where a non-PRC resident enterprise transfers the equity interests of a PRC resident enterprise indirectly via disposing of the equity interests of an overseas holding company, or an Indirect Transfer, and such overseas holding company is located in a tax jurisdiction that: (i) has an effective tax rate less than 12.5% or (ii) does not tax foreign income of its residents, the non-PRC resident enterprise, being the transferor, shall report to the relevant tax authority of the PRC resident enterprise this Indirect Transfer. Using a "substance over form" principle, the PRC tax authority may disregard the existence of the overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding or deferring PRC tax. As a result, gains derived from such Indirect Transfer may be subject to PRC withholding tax at a rate of up to 10%. SAT Circular 698 also provides that, where a non-PRC resident enterprise transfers its equity interests in a PRC resident enterprise to its related parties at a price that is not consistent with arm's length value, reducing taxable income, the relevant tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

        There is uncertainty as to the application of SAT Circular 698. For example, while the term "Indirect Transfer" is not clearly defined, it is understood that the relevant PRC tax authorities have jurisdiction regarding requests for information over a wide range of foreign entities having no direct contact with China. Moreover, the relevant authority has not yet promulgated any formal provisions or formally declared or stated how to calculate the effective tax rates in foreign tax jurisdictions. In addition, there are not any formal declarations with regard to how to determine whether a foreign investor has adopted an abusive arrangement in order to reduce, avoid or defer PRC tax.

        Accordingly, Tany International (Baoding) Solar Electric Co., Ltd., or Tany Baoding, as a company established in the PRC, is a PRC resident enterprise and Sky International Enterprise Group Limited, or Sky International Enterprise, as a company established in Hong Kong, may be deemed as a non-PRC resident enterprise under SAT Circular 698. The disposal of 100% of the equity interests in Tany International (Hong Kong) Co Limited, or Tany Hong Kong, which holds 100% of the equity interests in Tany Baoding, by Sky International Enterprise to Sky Solar (HongKong) International Co. Limited on May 28, 2013 may fall into the type of transactions subject to SAT Circular 698's regulation, given that such disposal may be categorized as an "Indirect Transfer" of equity interests in a PRC resident enterprise by a non-PRC resident enterprise as defined under SAT Circular 698. Therefore, Tany Baoding may be liable to assist tax authorities in collecting such tax from Sky International Enterprise Group Limited if the transfer of equity interests in Tany Hong Kong is subject to SAT Circular 698. However, it currently unclear how the relevant PRC tax authority will implement or enforce SAT Circular 698 and whether the enterprise income tax on capital gains will be subject to any further change resulting in any adverse impact on us.

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        As a result, we may become at risk of being taxed under SAT Circular 698 and we may be required to expend valuable resources to comply with SAT Circular 698 or to establish that we should not be taxed under the general anti-avoidance rule of the PRC Enterprise Income Tax Law, or EIT Law, which may have adverse effect on our financial condition and results of operations or such non-resident investors' investments in us.

Our global income may become subject to PRC income tax if we are deemed to be a PRC resident enterprise for PRC tax purposes and our non-PRC shareholders may be subject to PRC tax on dividends and gain realized on our shares.

        In connection with the EIT Law which came into effect on January 1, 2008, the Implementing Rules of the EIT Law, or the Implementing Rules, were enacted on December 6, 2007 and became effective on January 1, 2008. Under the EIT Law and the Implementing Rules, an enterprise established outside the PRC may be considered a "PRC resident enterprise" and be subject to PRC enterprise income tax on its global income at the rate of 25%, if its "de facto management body" is located within the PRC. The Implementing Rules define the term "de facto management body" as the body that exercises full and substantial control and overall management over the business, production processes, personnel, accounts and properties of an enterprise incorporated outside the PRC. At present, it is unclear how the foregoing factors will be applied by the PRC tax authorities to determine whether we have a de facto management body in the PRC. Since some of our management personnel currently reside in the PRC but the majority of our turnover arises from our operations outside the PRC, there is a possibility that the PRC tax authorities could determine that we are a PRC resident enterprise, which would make us subject to PRC tax on our worldwide income at a rate of 25%. This may have an adverse effect on our financial condition and results of operation. However, as described under "Taxation—PRC Taxation," our PRC legal counsel does not believe that we meet all of the conditions necessary to be considered a PRC resident enterprise.

        In addition, if we are treated as a "PRC resident enterprise" under PRC law, dividends we pay on our ADSs to non-PRC ADS holders or on our ordinary shares to non-PRC shareholders, and capital gains realized by such ADS holders or shareholders on the sale or other disposition of ADSs or ordinary shares, may be treated as PRC-source income. Accordingly, we may be required to withhold PRC income tax from dividends paid to non-PRC resident ADS holders or shareholders, and the transfer of ADSs or ordinary shares by such ADS holders or shareholders, as the case may be, may be subject to PRC income tax. Such tax on the income of non-PRC resident enterprise ADS holders or shareholders may be imposed at a rate of 10% (and may be imposed at a rate of 20% in the case of non-PRC resident individual ADS holders or shareholders), subject to the provisions of any applicable tax treaty. If we are required to withhold PRC income tax on dividends payable to our non-PRC resident ADS holders or shareholders, or if you are required to pay PRC income tax on the transfer of the ADSs, or ordinary shares, the value of your investment in our ADSs, or ordinary shares, may be materially and adversely affected.

We may not be able to adequately protect our intellectual property rights, including trademarks and know-how, which could harm our competitiveness.

        We rely on a combination of trademarks and know-how to protect our intellectual properties. As of the date of this prospectus, we have two licenses granting us the right to use 30 trademarks in 23 jurisdictions, including the brand name "Sky Solar," which we believe have been vital to our competitiveness and success and for us to attract and retain our clients and business partners. We license the brand name "Sky Solar" from our executive chairman, Mr. Su. See "—We rely on licensing arrangements with entities controlled by our executive chairman, Mr. Weili Su, to use the trademark "Sky Solar." Any improper use of these trademarks by our licensor or any other third parties could materially and adversely affect our business, financial condition and results of operations." We cannot

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assure you that the measures we have taken will be sufficient to prevent any misappropriation of our intellectual properties.

        We currently do not engage in business under the trademark "Sky Power." However, we do intend to apply for this trademark in certain jurisdictions. We anticipate that we will encounter difficulties when applying for this name and we may not be able to transact business under this name. For example, Sky Power is already registered in Canada.

        Intellectual property laws and means of enforcement of intellectual property laws vary by jurisdiction. Enforcement of our intellectual property rights could be time-consuming and costly. We may not be able to immediately detect and remediate unauthorized use of our intellectual property. In the event that the measures taken by us or the protection afforded by law do not adequately safeguard our intellectual property rights, we could suffer losses in revenue and profit due to competing offerings of services that exploit our intellectual properties. Furthermore, we cannot assure that any of our intellectual property rights will not be challenged by third parties. Adverse rulings in any litigation or proceedings could result in the loss of our proprietary rights and subject us to substantial liabilities, or even disrupt our business operations.

We rely on licensing arrangements with entities controlled by our executive chairman, Mr. Weili Su, to use the trademark "Sky Solar." Any improper use of these trademarks by our licensor or any other third parties could materially and adversely affect our business, financial condition and results of operations.

        Our rights to our trade names and trademarks are among the most important factor in marketing our services and operating our business. The trademark "Sky Solar," or " GRAPHIC " in Chinese, is owned by an entity controlled by Mr. Su, our founder and the executive chairman of our board of directors and we have obtained, under a license agreement, the non-exclusive right to use this trademark so long as the trademark is valid. Under the trademark license agreement, we are required to pay 0.05% of our revenue, not exceeding HK$10 million, to this entity for the trademark license starting from 2014 at the end of each year. The trademark "Sky Solar," or " GRAPHIC " is also used by the entity, its subsidiaries and affiliated entities, which are controlled by Mr. Su. If the entity, any of its subsidiaries or affiliated entities, or any third party uses the trade name "Sky Solar," " GRAPHIC " or trademarks we use to develop our services and operations in ways that adversely affect such trade name or trademark, our reputation could suffer damage, which in turn could have a material adverse effect on our business, financial condition and results of operations. In addition, if for any reason, we are no longer able to use the "Sky Solar" and " GRAPHIC " trademarks due to a dispute with the entity, or otherwise, our reputation, marketing ability, business and results of operations could be materially and adversely affected.

Fluctuations in foreign currency exchange rates may negatively affect our revenue, cost of sales and gross margins and could result in exchange losses.

        Our subsidiaries trade in their functional currencies in the course of their business operations. Our investment holding companies transact in functional currencies of their subsidiaries. Our investment holding companies have foreign financing and investing activities, which expose them to foreign currency risk. As a result, we are subject to significant risks associated with foreign currency exchange rate fluctuations. For example, in 2013 and the six months ended June 30, 2014, we recorded net foreign exchange losses of US$4.1 million and US$0.1 million, respectively, primarily due to the increase in depreciation of the Japanese Yen and Czech Crown against the U.S. dollar. Changes in the value of local currencies could increase our U.S. dollar costs or reduce our U.S. dollar revenue. Any increased costs or reduced revenue as a result of foreign exchange rate fluctuations could adversely affect our profit margins. The fluctuation of foreign exchange rates also affects the value of our monetary and other assets and liabilities denominated in local currencies, primarily the euro and JPY. Generally, an appreciation of the U.S. dollar against relevant local currencies could result in a foreign exchange loss for assets denominated in such local currencies and a foreign exchange gain for liabilities

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denominated in such local currencies. Conversely, a devaluation of the U.S. dollar against relevant local currencies could result in a foreign exchange gain for assets denominated in such local currencies and a foreign exchange loss for liabilities denominated in such local currencies.

        We could also expand our business into emerging markets, some of which may have an uncertain regulatory environment relating to currency policy. Conducting business in such emerging markets could cause our exposure to foreign exchange rate fluctuation risks to increase. Although we access a variety of financing solutions that are tailored to the geographic location of our projects and to local regulations, we have not entered into any hedging transactions to reduce the foreign exchange rate fluctuation risks, but may do so in the future when we deem it appropriate to do in light of the significance of such risks. However, if we decide to hedge our foreign exchange exposure in the future, we cannot assure you that we will be able to reduce our foreign currency risk exposure in an effective manner, at reasonable costs, or at all.

Our auditor, like other independent registered public accounting firms operating in China, is not permitted to be subject to inspection by Public Company Accounting Oversight Board, and as such, investors may be deprived of the benefits of such inspection.

        Our independent registered public accounting firm issued the audit report included in this prospectus and will issue audit reports filed with the SEC in the future.

        Generally, an auditor of companies that are traded publicly in the United States is registered with the Public Company Accounting Oversight Board (United States), or PCAOB, and is required by the laws of the United States to undergo regular inspections by PCAOB to assess its compliance with the laws of the United States and professional standards. However, as our auditor is located in China, a jurisdiction where PCAOB is currently unable to conduct inspections without the approval of the PRC authorities, our auditor, like other independent registered public accounting firms operating in China, is currently not inspected by PCAOB.

        Inspections of other firms outside of China conducted by PCAOB have identified deficiencies in those firms' audit procedures and quality control procedures. The inability of PCAOB to conduct inspections of independent registered public accounting firms operating in China makes it more difficult to evaluate the effectiveness of our auditor's audit procedures or quality control procedures. As a result, investors may be deprived of the benefits of PCAOB inspections.

Proceedings instituted by the SEC against five PRC-based accounting firms, including our independent registered public accounting firm, could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act.

        In late 2012, the SEC commenced administrative proceedings under Rule 102(e) of its Rules of Practice and also under the Sarbanes-Oxley Act of 2002 against the Chinese affiliates of the "big four" accounting firms,(including our auditors) and also against Dahua (the former BDO affiliate in China). The Rule 102(e) proceedings initiated by the SEC relate to these firms' inability to produce documents, including audit work papers, in response to the request of the SEC pursuant to Section 106 of the Sarbanes-Oxley Act of 2002, as the auditors located in the PRC are not in a position lawfully to produce documents directly to the SEC because of restrictions under PRC law and specific directives issued by the China Securities Regulatory Commission. The issues raised by the proceedings are not specific to our auditors or to us, but affect equally all audit firms based in China and their audit clients.

        In January 2014, the administrative judge reached an Initial Decision that the "big four "accounting firms should be barred from practicing before the Commission for six months. However, it is currently impossible to determine the ultimate outcome of this matter as the accounting firms have filed a Petition for Review of the Initial Decision and pending that review the effect of the Initial Decision is suspended. The SEC Commissioners will review the Initial Decision, determine whether there has been any violation and, if so, determine the appropriate remedy to be placed on these audit

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firms. Once such an order was made, the accounting firms would have a further right to appeal to the US Federal courts, and the effect of the order might be further stayed pending the outcome of that appeal.

        Depending upon the final outcome, listed companies in the United States with major PRC administrative functions may find it difficult or impossible to retain auditors in respect of their operations in the PRC, which could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act, including possible delisting. As of the date of this prospectus, we have no material business operations in China and do not have to use a PRC-based audit firm. However, any negative news about the proceedings against any PRC-based audit firms may cause investor uncertainty regarding their current or past audit clients and the market price of our ADSs may be adversely affected.

We have limited business insurance coverage internationally.

        The insurance industry in many parts of the world is still in an early stage of development. Insurance companies in many countries offer only limited business insurance options. As a result, we have not maintained, and generally do not maintain, full liability, hazard or other insurance covering our services, business, operations, errors, acts or omissions, personnel or properties. To the extent that we are unable to recover from others for any uninsured losses, such losses could result in a loss of capital and significant harm to our business. If any action, suit, or proceeding is brought against us and we are unable to pay a judgment rendered against us or defend ourselves against such action, suit, or proceeding, our business, financial condition and operations could be negatively affected.

Risks Related to This Offering and Our ADSs

There has been no public market for our ordinary shares or ADSs prior to this offering. You may not be able to sell our ADSs at or above the price you paid, or at all.

        Prior to this offering, there has been no public market for our ordinary shares or ADSs. We have applied for listing on the NASDAQ Global Select Market, or the NASDAQ. Our ordinary shares will not be listed on any exchange or quoted for trading on any over-the-counter trading system. An active and liquid trading market for our ADSs may not develop after this offering or be sustained in the future. If an active trading market for our ADSs does not develop or is not sustained, it may be difficult for you to sell the ADSs at an attractive price, or at all. The initial public offering price of our ADSs, determined by negotiations between us and the underwriters, may bear no relationship to the market price of our ADSs after this offering. The market price of our ADSs may decline below the initial public offering price. Furthermore, if an active trading market does not develop or is not sustained, we may not be able to meet the continued listing requirements of the NASDAQ.

The trading prices of our ADSs may be volatile, which could result in substantial losses to investors.

        The price and trading volume of our ADSs may be highly volatile and subject to wide fluctuations due to factors beyond our control. This may happen because of broad market and industry factors. The securities of some of these companies have experienced significant volatility since their initial public offerings, including, in some cases, substantial price declines in the trading prices of their securities. The trading performances of these Chinese companies' securities after their offerings, including companies in the solar industry, may affect the attitudes of investors toward Chinese companies listed in the United States, which consequently may impact the trading performance of our ADSs, regardless of our actual operating performance. In addition, any negative news or perceptions about inadequate corporate governance practices or fraudulent accounting or other practices at other Chinese companies may also negatively affect the attitudes of investors towards Chinese companies in general, including us, regardless of whether we have engaged in such practices. In addition, securities markets may from time to time experience significant price and volume fluctuations that are not related to our operating performance, such as the large decline in share prices in the United States, China and other

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jurisdictions in late 2008, early 2009, the third quarter of 2011 and the second quarter of 2012, which may have a material adverse effect on the market price of our ADSs.

        In addition to market factors, the price and trading volume for our ADSs may be highly volatile for factors specific to our own operations and the solar industry, including the following:

        Any of these factors may result in large and sudden changes in the volume and price at which our ADSs will trade. Furthermore, the securities market has from time to time experienced significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations may also have a material adverse effect on the market price of our ADSs.

Because we do not expect to pay dividends in the foreseeable future after this offering, you must rely on price appreciation of our ADSs for return on your investment.

        We currently intend to retain most, if not all, of our available funds and any future earnings after this offering to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our ADSs as a source for any future dividend income.

        Our board of directors has complete discretion as to whether to distribute dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiary, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our ADSs will likely depend entirely upon any future price appreciation of our ADSs. There is no guarantee that our ADSs will appreciate in value after this offering or even maintain the price at which you purchased the ADSs. You may not realize a return on your investment in our ADSs and you may even lose your entire investment in our ADSs.

You may not receive dividends or other distributions on our ordinary shares and you may not receive any value for them, if it is illegal or impractical to make them available to you.

        The depositary of our ADSs has agreed to pay to you the cash dividends or other distributions it or the custodian receives on ordinary shares or other deposited securities underlying our ADSs, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares your ADSs represent. However, the depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any holders of ADSs. For example, it would be unlawful to make a distribution to a holder of ADSs if it consists of securities that require registration under the Securities Act but that are not properly registered or distributed under an applicable exemption from registration. The depositary may also determine that it is not feasible to

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distribute certain property through the mail. Additionally, the value of certain distributions may be less than the cost of mailing them. In these cases, the depositary may determine not to distribute such property. We have no obligation to register under U.S. securities laws any ADSs, ordinary shares, rights or other securities in connection with such distributions. We also have no obligation to take any other action to permit the distribution of ADSs, ordinary shares, rights or anything else to holders of ADSs. This means that you may not receive distributions we make on our ordinary shares or any value for them if it is illegal or impractical for us to make them available to you. These restrictions may cause a material decline in the value of our ADSs.

Because the initial public offering price of our ADSs is substantially higher than our pro forma net tangible book value per ADS, you will incur immediate and substantial dilution.

        If you purchase ADSs in this offering, you will pay more for your ADSs than the amount paid by our existing shareholders for their ordinary shares on a per ADS basis. As a result, you will experience immediate and substantial dilution of approximately US$6.94 per ADS (assuming no exercise by the underwriters of the option to acquire additional ADSs), representing the difference between our pro forma net tangible book value per ADS as of June 30, 2014, after giving effect to this offering and the initial public offering price of US$11.00 per ADS, the mid-point of the estimated range of the initial offering price shown on the cover of this prospectus. In addition, you may experience further dilution to the extent that the underwriters exercise the option to acquire additional ADSs or our ordinary shares are issued upon the exercise of outstanding or to-be-issued share options. See "Dilution" for a more complete description of how the value of your investment in our ADSs will be diluted upon completion of this offering.

Substantial future sales or perceived sales of our ADSs in the public market could cause the price of our ADSs to decline.

        Sales of substantial amount of our ADSs or ordinary shares in the public market after this offering, or the perception that these sales could occur, could cause the market price of our ADSs to decline. Upon completion of this offering, we will have 439,196,670 ordinary shares outstanding, including 100,000,000 ordinary shares represented by 12,500,000 ADSs. In addition, the underwriters have an option to purchase an additional 15,000,000 ordinary shares represented by 1,875,000 ADSs. All ADSs sold in this offering or purchased by the underwriters pursuant to their option will be freely transferable without restriction or additional registration under the Securities Act of 1933, as amended, or the Securities Act. The remaining ordinary shares outstanding after this offering will be available for sale, upon the expiration of the 180-day lock-up period beginning from the date of this prospectus, subject to volume and other restrictions as applicable under Rule 144 and Rule 701 under the Securities Act. Any or all of these shares (other than those held by certain option holders) may be released prior to expiration of the lock-up period at the discretion of the underwriters at any time, subject to applicable regulations of the Financial Industry Regulatory Authority, Inc. In addition, we may also issue additional options in the future which may be exercised for additional ordinary shares. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our ADSs. In addition, the exercise of the underwriters' option to purchase ordinary shares may also affect the market price of our ADSs. See "Underwriting" and "Shares Eligible for Future Sale" for a more detailed description of the restrictions on selling our securities after this offering.

Our articles of association contain anti-takeover provisions that could have a material and adverse effect on the rights of holders of our ordinary shares and ADSs.

        We will adopt our amended and restated articles of association that will become effective immediately upon completion of this offering. Our new articles of association limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These

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provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. For example, our board of directors has the authority, without further action by our shareholders, to issue preferred shares in one or more series and to fix their designations, powers, preferences, privileges and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our ordinary shares, in the form of ADS or otherwise. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of our ADSs may fall and the voting and other rights of the holders of our ordinary shares and ADSs may be materially and adversely affected.

There can be no assurance on the accuracy or completeness of certain facts, forecasts and other statistics obtained from various government publications, market data providers and other independent third party sources, including the industry expert report, contained in this prospectus.

        Certain facts, forecasts and other statistics relating to the various countries and regions and the solar industry contained in this prospectus have been derived from various government publications, market data providers and other third party sources, including NPD Solarbuzz, an industry expert. While we have no reason to believe that such information is false or misleading or that any fact has been omitted that would render such information false or misleading, we cannot guarantee the accuracy and completeness of such information. While we have taken reasonable care to ensure that such facts, forecasts and other statistics have been accurately reproduced from their respective sources, these facts, forecasts and other statistics have not been independently verified by us, the underwriters, our respective directors and advisers or any other parties involved in this offering and none of us make any representation as to the accuracy or completeness of such information. Due to possibly flawed or ineffective collection methods or discrepancies between published information and market practice and other problems, the facts, forecasts and statistics contained herein may be inaccurate or may not be comparable to information produced by other parties. Therefore investors should give consideration as to how much weight or importance they should attach to or place on such facts, forecasts or statistics and in all cases, such information should not be unduly relied upon.

Holders of ADSs have fewer rights than shareholders and must act through the depositary to exercise those rights.

        Holders of ADSs do not have the same rights as our shareholders and may only exercise the voting rights with respect to the underlying ordinary shares in accordance with the provisions of the deposit agreement. Under our amended and restated articles of association, the minimum notice period required to convene a general meeting is ten days. When a general meeting is convened, you may not receive sufficient notice of a shareholders' meeting to permit you to withdraw your ordinary shares to allow you to cast your vote with respect to any specific matter. In addition, the depositary and its agents may not be able to send voting instructions to you or carry out your voting instructions in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to you in a timely manner, but you may not receive the voting materials in time to ensure that you can instruct the depositary to vote the ordinary underlying your ADSs. Furthermore, the depositary and its agents will not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the effect of any such vote. As a result, you may not be able to exercise your right to vote and you may lack recourse if the underlying ordinary shares of your ADSs are not voted as you requested. In addition, in your capacity as an ADS holder, you will not be able to call a shareholders' meeting.

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Our executive officers, directors, principal shareholders and affiliated entities have substantial control and influence over our corporate actions and business, and their interests may not be aligned with our other shareholders.

        After this offering, our executive officers, directors, principal shareholders and their affiliated entities will beneficially own approximately 47.6% of our outstanding shares. Our executive officers and certain shareholders have granted our executive chairman, Mr. Weili Su, an irrevocable proxy, with full power of substitution and resubstitution, to vote on their behalf in our elections. After giving effect to the Conversion and the Share Distribution and after this offering, Mr. Su will have the ability to vote or the proxy to vote an aggregate of 40.9% of our outstanding shares. Mr. Su, through a company wholly-owned by his trust, has granted one of our Japanese silent partners, an affiliate of an international private equity firm, the right to purchase $30 million of shares, based on the price as of the date of this prospectus, during a two-year period commencing on the date which is 180 days after the pricing date of this initial public offering, which if exercised, would result in Mr. Su having the ability to vote or the proxy to vote an aggregate of 36.0% of our outstanding shares, assuming an initial public offering price of US$11.00 per ADS, the mid-point of the estimated price range set forth on the cover of this prospectus. For more information on the Conversion, the Share Distribution and Mr. Su's beneficial ownership in our company after giving effect to the Conversion and the Share Distribution, see "Capitalization" and "Principal Shareholders." As a result, Mr. Su exerts substantial influence over matters requiring approval by our shareholders, including electing directors and approving mergers or other business combination transactions and he may not act in the best interests of other shareholders. Mr. Su also controls the "Sky Solar" and " GRAPHIC " trademarks licensed to us, and holds solar parks in Greece and China under the "Sky Solar" and " GRAPHIC " brand that are not part of our company. This concentration of ownership may also discourage, delay or prevent a change in control of our company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company and reduce the price of our ADSs. These actions may be taken even if they are opposed by our other shareholders, including you. Without their consents, we could be prevented from entering into transactions that could be beneficial to us. Although Mr. Su has fiduciary obligations to our company as a director, his interests may not always be aligned with the interests of our other shareholders. Mr. Su may also take actions to prevent us from continuing to use the trademarks.

We have entered into a deed of non-competition and right of first refusal with Mr. Su with respect to his businesses in China, which may result in a transaction that is not on an arm's length basis.

        We have entered into a deed of non-competition and right of first refusal with Mr. Su whereby he promises that he and any company he controls will not engage in any business that competes with us and grants us the right of first refusal to purchase shares in his businesses in China in which he owns more than 50% of the voting shares in the event that Mr. Su receives from or otherwise negotiate with a third party a bona fide offer to purchase Mr. Su's shares in any of the business and the sale of such shares will result in Mr. Su ceasing control of that business. We cannot assure you that we will be able to enforce the agreement or exercise the right of first refusal when Mr. Su wishes to sell his business interests in China. Moreover, the non-competition clause will terminate at the earlier of (i) the delisting of our ADSs and ordinary shares from the NASDAQ, (ii) the time when Mr. Su ceases to be our largest shareholder and (iii) upon the mutual agreement of Mr. Su and our company to terminate the non-competition clause. We will have the right of first refusal to purchase Mr. Su's shares in his business in China when the sale of the shares will result in Mr. Su ceasing control of that business and the right will terminate at the earlier of (i) the delisting of our ADSs and ordinary shares from the NASDAQ and (ii) upon the mutual agreement to terminate by Mr. Su and our company. The right of first refusal does not extend to the sale of individual solar assets. "Control" is defined as the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting shares, by contract, or otherwise. Additionally, under the laws and practice of the Cayman Islands, shareholders may not be afforded the

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same level of protection from an affiliate transaction that would typically be the case for a Delaware corporation, such as fairness opinions and an independent due diligence process. We cannot assure you that the deed of non-competition and the right of first refusal, or the subsequent sale of Mr. Su's businesses to us, if any, will be negotiated or administered on an arm's length basis. In addition, we cannot assure you that Mr. Su will ever wish to sell his business in China, or that our right of first refusal will ever be exercised or that any purchase by us of any of Mr. Su's businesses in China would be on terms equivalent to an arm's length transaction.

The depositary for our ADSs may give us a discretionary proxy to vote the ordinary shares underlying your ADSs if you do not vote at shareholders' meetings, which could adversely affect your interests.

        Under the deposit agreement for our ADSs, if we asked for your voting instructions but the depositary does not receive your instructions by the cut-off date specified in the related notice, the depositary will give us a discretionary proxy to vote the ordinary shares underlying your ADSs as to all matters at the shareholders' meeting unless:

        The effect of this discretionary proxy is that if you do not vote at shareholders' meetings, you cannot prevent the ordinary shares underlying your ADSs from being voted, except under the circumstances described above. This may make it more difficult for shareholders to influence the management of our company. Holders of our ordinary shares are not subject to this discretionary proxy.

You may be subject to limitations on transfers of your ADSs.

        Your ADSs are transferable on the books of the depositary. However, the depositary may close its transfer books at any time or from time to time when it deems expedient in connection with the performance of its duties. In addition, the depositary may refuse to deliver, transfer or register transfers of ADSs generally when our books or the books of the depositary are closed, or at any time if we or the depositary deem it advisable to do so because of any requirement of law or of any government or governmental body, or under any provision of the deposit agreement, or for any other reason.

You may face difficulties in protecting your interests and your ability to protect your rights through the U.S. federal courts may be limited.

        We are an exempted company with limited liability incorporated under the laws of the Cayman Islands. Most of our business operations are located outside the United States. A substantial majority of our directors and a substantial majority of our senior management team are residing outside of the United States, and a substantial portion of their assets are located outside of the United States. As a result, it may be difficult or impossible for you to bring an original action against us or against these individuals in a U.S. court in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands, China and many other jurisdictions where we have operations may render you unable to enforce a judgment against our assets or the assets of our directors and officers located in those jurisdictions. There is no statutory recognition in the Cayman Islands of judgments

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obtained in the United States, although the courts of the Cayman Islands will generally recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. In addition, China does not have any treaties or other agreements that provide for reciprocal recognition and enforcement of foreign judgments with the United States. For more information regarding the relevant laws of the Cayman Islands, China and other jurisdictions where we have operations, see "Enforceability of Civil Liabilities."

        Our corporate affairs are governed by our memorandum and articles of association and by the Companies Law (2013 Revision) and common law of the Cayman Islands. The rights of shareholders to take legal action against our directors and us, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, which has persuasive, but not binding, authority on a court in the Cayman Islands. The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedents in the United States. In particular, the Cayman Islands have a less developed body of securities laws as compared to the United States, and provide significantly less protection to investors. In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action before the federal courts of the United States. As a result, your ability to protect your interests if you are harmed in a manner that would otherwise enable you to sue in a United States federal court may be limited to direct shareholder lawsuits.

        Shareholders of Cayman Islands exempted companies such as ourselves have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders of these companies. Our directors have discretion under our amended and restated articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

        As a result of all of the above, our public shareholders may have more difficulty in protecting their interests through actions against our management, directors or major shareholders than would shareholders of a corporation incorporated in a jurisdiction in the United States.

We have considerable discretion in the application of the net proceeds from this offering and we may use these proceeds in ways with which you may not agree.

        We have not determined a specific use for a portion of the net proceeds of this offering. Our management will have considerable discretion in the application of these proceeds to be received by us. You will not have the opportunity, as part of your investment decision, to assess whether the proceeds are being used appropriately. You must rely on the judgment of our management regarding the application of the net proceeds of this offering. The net proceeds may be used for corporate or other purposes with which you do not agree or that do not improve our profitability or increase our ADS price. The net proceeds from this offering may also be placed in investments that do not produce income or that lose value.

We will rely on the foreign private issuer exemption from most of the corporate governance requirements under the NASDAQ Global Market Listing Rules.

        We are exempt from certain corporate governance requirements of the NASDAQ by virtue of being a foreign private issuer. We are required to provide a brief description of the significant differences between our corporate governance practices and the corporate governance practices required to be followed by U.S. domestic companies under the NASDAQ listing rules. The standards

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applicable to us are considerably different than the standards applied to U.S. domestic issuers. The significantly different standards applicable to us do not require us to:

        We are not required to and will not voluntarily meet these requirements. As a result of our use of the "foreign private issuer" exemptions, you will not have the same protection afforded to shareholders of companies that are subject to all of NASDAQ's corporate governance requirements. For a description of the material corporate governance differences between NASDAQ requirements and Cayman Islands law, see "Description of Share Capital—Differences in Corporate Law."

We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an "emerging growth company".

        Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC and the NASDAQ impose various requirements on the corporate governance practices of public companies.

        We expect these rules and regulations to increase our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer an "emerging growth company," we expect to incur significant expenses and devote substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For example, as a result of becoming a public company, we will need to increase the number of independent directors and adopt policies regarding internal controls and disclosure controls and procedures. We also expect that operating as a public company will make it more difficult and more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. In addition, we will incur additional costs associated with our public company reporting requirements. It may also be more difficult for us to find qualified persons to serve on our board of directors or as executive officers. We are currently evaluating and monitoring developments with respect to these rules and regulations, and we cannot predict or estimate with any degree of certainty the amount of additional costs we may incur or the timing of such costs.

        In the past, shareholders of a public company often brought securities class action suits against the company following periods of instability in the market price of that company's securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations, which could harm our results of operations and require us to incur significant expenses to defend the suit. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

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We are a "foreign private issuer," and our disclosure obligations differ from those of U.S. domestic reporting companies. As a result, we may not provide you the same information as U.S. domestic reporting companies or we may provide information at different times, which may make it more difficult for you to evaluate our performance and prospects.

        We are a foreign private issuer and, as a result, we are not subject to the same requirements as U.S. domestic issuers. Under the Exchange Act, we will be subject to reporting obligations that, to some extent, are more lenient and less frequent than those of U.S. domestic reporting companies. For example, we will not be required to issue proxy statements. We will not be required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers will not be required to report equity holdings under Section 16 of the Exchange Act and will not be subject to the insider short-swing profit disclosure and recovery regime. Although we are not required to issue quarterly reports, we intend to furnish our interim financial information on Form 6-K and publish our results on a quarterly basis as press releases, distributed pursuant to the rules and regulations of the NASDAQ.

        As a foreign private issuer, we will also be exempt from the requirements of Regulation FD (Fair Disclosure) which, generally, are meant to ensure that select groups of investors are not privy to specific information about an issuer before other investors. However, we will still be subject to the anti-fraud and anti-manipulation rules of the SEC, such as Rule 10b-5 under the Exchange Act. Since many of the disclosure obligations imposed on us as a foreign private issuer differ from those imposed on U.S. domestic reporting companies, you should not expect to receive the same information about us and at the same time as the information provided by U.S. domestic reporting companies.

We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

        We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2012 for so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.

We may be or become a passive foreign investment company for U.S. federal income tax purposes, which could result in adverse U.S. federal income tax consequences to U.S. investors in our ADSs or ordinary shares.

        A non-U.S. corporation will be a passive foreign investment company, or PFIC, for any taxable year in which (1) at least 75% of its gross income is passive income or (2) at least 50% of the value (based on an average of quarterly values) of its assets is attributable to assets that produce or are held for the production of passive income. If we are classified as a PFIC, our ADSs or ordinary shares will continue to be treated as shares in a PFIC for all succeeding years during which a U.S. Holder holds our ADSs or ordinary shares, unless we cease to be a PFIC and the U.S. Holder makes certain elections with respect to the ADSs or ordinary shares.

        Based on the current and projected composition of our income and value of our assets, we do not currently expect to be a PFIC for our current taxable year ending December 31, 2014 or the foreseeable future. However, a separate determination must be made at the close of each taxable year as to whether we are a PFIC for such year. In addition, our PFIC status will depend upon the composition of our income and assets from time to time, including the value of our ADSs at any such time. Our PFIC status will also depend, in part, on how, and how quickly, we spend the cash we raise in this offering. Accordingly, there can be no assurance that we will not be a PFIC for our current taxable year or any future taxable year. If we were treated as a PFIC for any taxable year during which a U.S. Holder (as defined in "Taxation—United States Federal Income Taxation") holds our ADSs or ordinary shares, certain adverse U.S. federal income tax consequences and additional reporting requirements could apply to that U.S. Holder. You are urged to consult your tax advisor regarding our possible status as a PFIC. See "Taxation—United States Federal Income Taxation—Passive Foreign Investment Company."

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains forward looking statements that relate to our current expectations and views of future events. The forward looking statements are contained principally in the sections entitled "Prospectus Summary," "Risk Factors," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Industry" and "Business." These statements relate to events that involve known and unknown risks, uncertainties and other factors, including those listed under "Risk Factors," which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward looking statements.

        In some cases, these forward looking statements can be identified by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "likely to" or other similar expressions. We have based these forward looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs, including our disclosed estimates regarding our future pipeline under construction and in pipeline. These forward looking statements involve risks, uncertainties and assumptions related to, among other things:

        The forward looking statements made in this prospectus relate only to events or information as of the date on which the statements are made in this prospectus. Except as required by law, we undertake no obligation to update or revise publicly any forward looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect

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the occurrence of unanticipated events. You should read this prospectus and the documents that we reference in this prospectus and have filed as exhibits to the registration statement, of which this prospectus is a part, completely and with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this prospectus include additional factors that could adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements.

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USE OF PROCEEDS

        We estimate that we will receive net proceeds from this offering of approximately US$121.9 million. These estimates are based upon an assumed initial offering price of US$11.00 per ADS, the mid-point of the estimated range of the initial public offering price as set forth on the cover page of this prospectus, after deducting the estimated underwriting discounts, commissions and estimated aggregate offering expenses payable by us and assuming no exercise of the underwriters' option to purchase additional ADSs and no other change to the number of ADSs offered by us as set forth on the cover page of this prospectus. A US$1.00 increase (decrease) in the assumed initial public offering price of US$11.00 per ADS would increase (decrease) the net proceeds to us from this offering by US$11.6 million.

        We intend to use the net proceeds we receive from this offering for the following purposes:

        We intend for the balance to be used for general corporate purposes, including working capital needs, potential strategic investments and other business opportunities.

        We do not currently have any agreements or memorandum of understandings to make any material acquisitions of, or investments in, other businesses, products or technologies.

        The foregoing use of our net proceeds from this offering represents our current intentions based upon our present plans and business condition. The amounts and timing of any expenditure will vary depending on the amount of cash generated by our operations, competitive and technological developments and the rate of growth, if any, of our business. Accordingly, our management will have significant discretion in the allocation of the net proceeds we will receive from this offering. Depending on future events and other changes in the business climate, we may determine at a later time to use the net proceeds for different purposes.

        Pending the use of the net proceeds, we intend to hold our net proceeds in short-term, interest-bearing debt instruments or demand deposits.

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DIVIDEND POLICY

        We have not and do not intend to declare or pay any dividends on our ordinary shares in the near future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board of directors deems relevant.

        Our board of directors has complete discretion on whether to pay dividends, subject to the approval of our shareholders. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends, we will pay our ADS holders to the same extent as holders of our ordinary shares, subject to the terms of the deposit agreement, including the fees and expenses payable thereunder. See "Description of American Depositary Shares." Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

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CAPITALIZATION

        Sky Power Group Ltd. is currently our parent company, to which we previously issued one ordinary share in total and issued an additional 339,196,669 ordinary shares on September 16, 2014. Immediately prior to the completion of this initial public offering, all of the outstanding preferred shares of Sky Power Group Ltd. will be converted into 69,569,106 ordinary shares of Sky Power Group Ltd. ("conversion of the preferred shares"); all of the convertible notes issued by Sky Power Group Ltd. will be converted into 35,228,452 ordinary shares of Sky Power Group Ltd. ("conversion of the convertible notes," together with the conversion of the preferred shares, the "Conversion"). Upon completion of the Conversion, Sky Power Group Ltd. will have a total of 339,196,672 ordinary shares outstanding.

        Upon completion of the Conversion, Sky Power Group Ltd. will transfer all the ordinary shares of our company that it owns to its shareholders in proportion to their shareholdings in Sky Power Group Ltd. as consideration for its repurchase of all of its outstanding ordinary shares from its shareholders except for two shares owned by Flash Bright Power Ltd., an entity controlled by our founder and executive chairman, Mr. Weili Su (the "Share Distribution"). Upon completion of the Share Distribution, shareholders of Sky Power Group Ltd. will become our direct shareholders, holding direct interests in our ordinary shares proportionate to their previous indirect interests.

        The following table sets forth our capitalization as of June 30, 2014:

        The as adjusted information below is illustrative only and our capitalization following the completion of this offering is subject to adjustment based on the initial public offering price of the ADSs and other terms of this offering determined at pricing. You should read this table in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and related notes included elsewhere in this prospectus.

 
  As of June 30, 2014  
 
  Actual   Pro Forma(1)  
 
  (US$ in thousands)
 

Long-Term Borrowings

    20,893     20,893  

Capital and reserves:

             

Share capital

        10  

Reserves(1)

    101,512     223,399  

Non-controlling interests

    (31 )   (31 )

Total equity(1)

    101,481     223,378  
           

Total capitalization(1)

    122,374     244,271  
           
           

(1)
A US$1.00 increase (decrease) in the assumed public offering price of US$11.00 would increase (decrease) each of reserves, total equity and total capitalization by US$11.6 million.

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DILUTION

        If you invest in our ADSs, your interest will be diluted to the extent of the difference between the initial public offering price per ADS and our net tangible book value per ADS after this offering. Dilution results from the fact that the initial public offering price per ordinary share is substantially in excess of the book value per ordinary share attributable to the existing shareholders for our outstanding ordinary shares prior to the offering after giving effect to the Conversion and the Share Distribution. For more information on the Conversion and the Share Distribution, see "Capitalization". Unless otherwise specifically indicated, discussion on the per share information prior to the offering and the existing shareholders information has given effect to the Conversion and the Share Distribution immediately prior to the completion of the offering.

        Our net tangible book value as of June 30, 2014 was approximately US$101.1 million, or US$0.30 per ordinary share and US$2.38 per ADS. Net tangible book value represents the amount of our total consolidated tangible assets, minus the amount of our total consolidated liabilities. Without taking into account any other changes in such net tangible book value after June 30, 2014, other than to give effect to our sale of the ADSs offered in this offering at the assumed initial public offering price of US$11.00 per ADS, the mid-point of the estimated range of the initial public offering price as set forth on the cover page of this prospectus, and after deduction of underwriting discounts, commissions and estimated offering expenses of this offering payable by us, our adjusted net tangible book value as of June 30, 2014 would have increased to US$223.0 million or US$0.51 per ordinary share and US$4.06 per ADS. This represents an immediate increase in net tangible book value of US$0.21 per ordinary share and US$1.67 per ADS, to the existing shareholder and an immediate dilution in net tangible book value of US$0.87 per ordinary share and US$6.94 per ADS, to investors purchasing ADSs in this offering. The following table illustrates such per share dilution:

Estimated initial public offering price per ordinary share

  US$ 1.38  

Net tangible book value per ordinary share as of June 30, 2014

  US$ 0.30  

As adjusted net tangible book value after giving effect to this offering

  US$ 0.51  

Amount of dilution in net tangible book value per ordinary share to new investors in this offering

  US$ 0.87  

Amount of dilution in net tangible book value per ADS to new investors in this offering

  US$ 6.94  

        A US$1.00 increase (decrease) in the assumed initial public offering price of US$11.00 per ADS would increase (decrease) our net tangible book value after giving effect to the offering by US$11.6 million, or by US$0.03 per ordinary share and by US$0.21 per ADS, assuming no change to the number of ADSs offered by us as set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and other expenses of the offering. The information discussed above is illustrative only. Our net tangible book value following the completion of this offering is subject to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

        The following table summarizes the differences between existing shareholders and the new investors with respect to the number of ordinary shares (in the form of ADSs or shares) purchased from us, the total consideration paid and the average price per ordinary share and per ADS. In the case of ADSs purchased by new investors, the consideration and price amounts are paid before deducting estimated underwriting discounts and commissions and estimated offering expenses, assuming an initial public offering price of US$11.00 per ADS, the mid-point of the estimated range of the initial public offering price. The total number of ordinary shares in the following table does not include ordinary shares underlying the ADSs issuable upon exercise of the option to purchase additional ADSs granted to the underwriters. The information in the following table is illustrative only and the total consideration paid and the average price per ordinary share and per ADS for new investors is subject

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to adjustment based on the actual initial public offering price of our ADSs and other terms of this offering determined at pricing.

 
  Ordinary Shares
Purchased
   
   
   
   
 
 
  Total Consideration    
   
 
 
  Average Price
Per Ordinary
Share
  Average Price
Per ADSs
 
 
  Number   Percent   Amount   Percent  

Existing shareholders

    339,196,670     77.2 % US$     % US$   US$  

New investors

    100,000,000     22.8 %   137,500,000     100 %   1.38     11.00  
                           

Total

    439,196,670     100 % US$ 137,500,000     100 % US$ 0.31   US$ 2.50  

        A US$1.00 increase (decrease) in the assumed initial public offering price of US$11.00 per ADS would increase (decrease) total consideration paid by new investors, total consideration paid by all shareholders and the average price per ADS paid by all shareholders by US$12.5 million, US$12.5 million and US$0.23, respectively, assuming no change in the number of ADSs sold by us as set forth on the cover page of this prospectus and without deducting underwriting discounts and commissions and other expenses of the offering.

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ENFORCEABILITY OF CIVIL LIABILITIES

        We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands corporation, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands have a less developed body of securities laws as compared to the United States and provide protections for investors to a significantly lesser extent. In addition, Cayman Islands companies do not have standing to sue before the federal courts of the United States.

        Substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or these persons, or to enforce against us or them judgments obtained in U.S. courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. It may also be difficult for you to enforce in U.S. courts judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us, our officers and directors.

        We have appointed Puglisi & Associates, as our agent to receive service of process with respect to any action brought against us in the United States District Court for the Southern District of New York under the federal securities laws of the United States or of any state in the United States or any action brought against us in the Supreme Court of the State of New York in the County of New York under the securities laws of the State of New York.

        Conyers Dill & Pearman (Cayman) Limited, our counsel as to Cayman Islands law, Dacheng Law Offices, our counsel as to PRC law, Ioannis K. Violaris, our counsel as to Greek law, Hayabusa Asuka Law Offices, our counsel as to Japanese law, Ivelina Stoyanova, our counsel as to Bulgarian law, Fogler, Rubinoff LLP, our counsel as to Canadian law, Cubillos Evans Abogados, our counsel as to Chilean law, and Wilson & Partners, s.r.o., our counsel as to the law of the Czech Republic, have advised us that there is uncertainty as to whether the courts of the Cayman Islands, the PRC, Greece, Japan, Bulgaria, Canada, Chile and the Czech Republic, respectively, would (1) recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state or territory in the United States, or (2) entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state or territory in the United States.

        Conyers Dill & Pearman (Cayman) Limited have informed us that the uncertainty with regard to Cayman Islands law relates to whether a judgment obtained from the U.S. courts under civil liability provisions of the securities law will be determined by the courts of the Cayman Islands as penal or punitive in nature. The courts of the Cayman Islands may not recognize or enforce such judgments against a Cayman company, and because such a determination has not yet been made by a court of the Cayman Islands, it is uncertain whether such civil liability judgments from U.S. courts would be enforceable in the Cayman Islands. Conyers Dill & Pearman has further advised us that the courts of the Cayman Islands would recognize a final and conclusive judgment in the federal or state courts of the United States under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) or, in certain circumstances, an in personam judgment for non-monetary relief, and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no new admissible evidence relevant to the

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action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands.

        Dacheng Law Offices, our counsel as to PRC Law, has advised us that the recognition and enforcement of foreign judgments are provided for under the PRC Civil Procedure Law. A foreign judgment, which does not otherwise violate basic legal principles, state sovereignty, safety or social public interest, may be recognized and enforced by a PRC court under the PRC Civil Procedure Law, based either on treaties contracted by China and the country where the judgment is made or on principles of reciprocity between jurisdictions. As there currently exists no treaty or other form of reciprocity between China and the United States or the Cayman Islands providing for the reciprocal recognition and enforcement of foreign judgments, including those predicated upon the civil liability provisions of the U.S. federal securities laws, it would be uncertain as to whether and on what basis a PRC court would enforce judgments rendered by U.S. courts or courts in the Cayman Islands.

        Under the PRC Civil Procedures Law, foreign shareholders may originate actions based on PRC law against us in the PRC, if they can establish sufficient nexus to the PRC for a PRC court to have jurisdiction, and meet other procedural requirements, including, among others, the plaintiff must have a direct interest in the case, and there must be a concrete claim, a factual basis and a cause for the suit. However, it would be difficult for foreign shareholders to establish sufficient nexus to the PRC by virtue of only holding our ADSs or ordinary shares.

        Ioannis K. Violaris, our counsel as to Greek law, has advised us that Greece does not have any treaties or other agreements with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments. Our counsel as to Greek law has advised us that the enforcement of foreign judgments are provided for under the Greek Civil Procedure Code. According to the Greek Civil Procedure Code, a Greek court may enforce a judgment of U.S. courts against us or our directors or officers if the Greek court determines that (i) the U.S. court judgment is enforceable under U.S. Law, (ii) the U.S. court had jurisdiction over the parties under Greek law, (iii) the losing party had its right to appear before the respective U.S. court and the right of being represented by counsel in the trial unless such rights were deprived by a legal provision that also applied to U.S. citizens, (iv) the judgment is not contrary to the judgment by a Greek court issued on the same case and between the same parties and (v) the judgment is not contrary to good morals and public policy, as determined by the Greek court.

        Hayabusa Asuka Law Offices, our counsel as to Japanese law, has advised us that Japan does not have any treaties or other agreements with the United States or the Cayman Islands that provide for the reciprocal recognition and enforcement of foreign judgments and the recognition and enforcement of foreign judgments are provided for under the Japanese Civil Procedure Law. Hayabusa Asuka Law Offices has further advised us that, according to the Japanese Civil Procedure Law, a final and binding judgment rendered by a foreign court shall be recognized and enforced by a Japanese court only when (i) the jurisdiction of the foreign court is recognized under laws or regulations or conventions or treaties of Japan; (ii) the losing party received service (excluding a service by publication or any other service similar thereto) of a summons or order necessary for the commencement of the suit, or appeared before a court without receiving such service; (iii) the judgment and the court proceedings are not contrary to public policy in Japan; and (iv) a Japanese court judgment on the same ground would be recognized in the foreign court that rendered the foreign judgment.

        Ivelina Stoyanova, our counsel as to Bulgarian law, has advised us that there is no treaty on the reciprocal recognition and enforcement of judgments on civil and commercial matters between Bulgaria and the United States or the Cayman Islands, or between the European Union and the United States or the Cayman Islands, and the courts in Bulgaria will not automatically recognize and enforce a judgment rendered by a U.S. court or a court in the Cayman Islands.

        According to our Bulgarian counsel, a Bulgarian court may recognize and enforce judgments of foreign courts when (i) the foreign court had jurisdiction under the relevant provisions of Bulgarian

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law, but not if the only basis for jurisdiction over a foreign property dispute was the nationality of the claimant or his registration in the country of the foreign court, (ii) the defendant was served with process, (iii) there is no judgment by a Bulgarian court on the same grounds, for the same claim and between the same parties, (iv) there is no pending litigation before a Bulgarian court which started before the commencement of the foreign proceeding, between the same parties, on the same grounds and for the same claim and (v) the recognition or enforcement of the foreign judgment is not contrary to a Bulgarian public order.

        Judgments of foreign courts shall not be recognized or enforced when (i) the judgments concern real property located in Bulgaria, for the execution of a lien on such property, or for the transfer or certification of property rights, or (ii) the judgments concern movables located in Bulgaria. The decision of a competent Bulgarian court in relation to the recognition of a foreign court judgment is subject to appeal to the Sofia regional court.

        Canada has no treaties with either the United States or the Cayman Islands that govern the reciprocal treatment of civil judgments. In Canada, enforcement of civil judgments issued in the United States or the Cayman Islands is subject to the general principle at common law that foreign judgments would, prima facie, be recognized and enforced in Canada if the foreign court that issued the judgment has jurisdiction over the matter, and the foreign judgment is a final order for payment of money. There are a number of exceptions to this general principle, including but not limited to cases where (1) the foreign judgment was obtained by fraud; (2) there was a denial of natural justice in the foreign proceeding leading to the judgment and (3) the enforcement would be contrary to public policy concerns in Canada. If any of the exceptions is found by the Canadian court to exist, it is likely that the foreign judgment would not be enforced in Canada.

        Cubillos Evans Abogados, our Chilean counsel, has advised us that no treaty exists between the United States and Chile for the reciprocal recognition and enforcement of foreign judgments. Chilean courts, however, have enforced valid and conclusive judgments for the payment of money rendered by competent U.S. courts by virtue of the legal principles of reciprocity and comity, subject to review in Chile of the U.S. judgment in order to ascertain whether certain basic principles of due process and public policy have been respected, without retrial or review of the merits of the subject matter. If a U.S. court grants a final judgment, enforceability of this judgment in Chile will be subject to obtaining the relevant exequatur (i.e., recognition and enforcement of the foreign judgment), according to Chilean civil procedure law in effect at that time, and depending on certain factors (the satisfaction or non-satisfaction of which would be determined by the Supreme Court of Chile). Currently, the most important of such factors are: the existence of reciprocity (if it can be proved that there is no reciprocity in the recognition and enforcement of the foreign judgment between the United States and Chile, that judgment would not be enforced in Chile); the absence of any conflict between the foreign judgment and Chilean laws (excluding for this purpose the laws of civil procedure) and Chilean public policy; the absence of a conflicting judgment by a Chilean court relating to the same parties and arising from the same facts and circumstances; the Chilean court's determination that the U.S. courts had jurisdiction, that process was appropriately served on the defendant and that the defendant was afforded a real opportunity to appear before the court and defend its case; and the judgment being final under the laws of the country in which it was rendered. Nonetheless, we have been advised by our Chilean counsel that there is doubt as to the enforceability in original actions in Chilean courts of liabilities predicated solely upon U.S. federal or state securities laws.

        Wilson & Partners, s.r.o., our counsel as to the laws of the Czech Republic, has advised us that as there is no treaty on the reciprocal recognition and enforcement of judgments in civil and commercial matters between the Czech Republic and the United States or the Cayman Islands, courts in the Czech Republic will not automatically recognize or enforce a final judgment against a Czech national or a Czech entity by a U.S. court or a Cayman Islands court. In order to obtain a judgment enforceable in the Czech Republic, claimants must litigate the relevant claim again before a Czech court of competent jurisdiction under the relevant laws of the Czech Republic.

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CORPORATE HISTORY AND STRUCTURE

        We are a Cayman Islands holding company and conduct all of our business through and derive all of our income from our investment holding subsidiaries and operating subsidiaries in various countries around the world. In 2007, our founder and executive chairman, Mr. Weili Su, already a successful businessman and founder of a few solar companies in China, made investments in Europe and began to develop renewable energy power parks in Germany, the Czech Republic and Spain. Beginning in 2009, he expanded his investments to Japan, Canada and the United States, focusing on the construction and operation of solar parks. A number of these ventures became part of our current operations.

        In 2009, Mr. Su incorporated Sky Solar Holdings Co., Ltd., in the Cayman Islands as a vehicle to consolidate his interests in various ventures involving solar parks and to facilitate capital-raising activities. Sky Solar Holdings Co., Ltd. was the immediate holding company of Sky Solar Power Ltd., a limited liability company incorporated in the British Virgin Islands before our establishment. In 2010, we connected our first projects in the Czech Republic and Greece. In 2011, we expanded into Latin America. In 2012, we shifted our focus to IPP and opened our strategic operations in South Africa. On August 19, 2013, in order to facilitate the listing of his business, Mr. Su incorporated our company under our former name Sky Power Holdings, Ltd., as the listing vehicle and concurrently we became the holding company of Sky Solar Power Ltd. The immediate holding company of our company is Sky Power Group Ltd., which was incorporated on June 24, 2013 as an exempted company with limited liability in the Cayman Islands. On June 26, 2014, we changed the name of Sky Power Holdings Ltd. to Sky Solar Holdings, Ltd. On October 21, 2014, Sky Solar Holdings Co., Ltd. ceased to be a shareholder of ours.

        This legal reorganization, whereby the company and Sky Power Group Ltd. were established as intermediate entities between Sky Solar Holdings Co., Ltd. and Sky Solar Power Ltd., through one-to-one share swap, has been accounted for as a reorganization of entities under common control. Through this reorganization, our company now owns substantially all of the business operations previously held by Sky Solar Holdings Co., Ltd.

        The following chart illustrates the principal entities in our current corporate structure:

GRAPHIC

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        We currently conduct our business through the following principal subsidiaries:

Entity
  Place of Incorporation   Function
Sky Solar Power Ltd.   British Virgin Islands   Holding entity

Sky International Enterprise Group Ltd.

 

Hong Kong

 

Holding entity

Sky Solar Energy S.à.r.l.

 

Luxembourg

 

Holding entity

Sky Capital Europe S.à.r.l.

 

Luxembourg

 

Holding entity

Sky Capital Advisory GmbH

 

Germany

 

Holding entity

Moktap Holdings Ltd.

 

Cyprus

 

Holding entity

Sky Capital Investment 11 SL

 

Spain

 

Holding entity

Sky Solar Japan K.K.

 

Japan

 

Holding entity

Sky Solar Iberica S.L.

 

Spain

 

Operating entity engaged in the construction of pipeline and provision of EPC services

Sky Development Renewable Energy Resources S.A.

 

Greece

 

Operating entity engaged in the construction, installation and management of renewable energy solar parks

Sky Solar Bulgaria Co. EOOD

 

Bulgaria

 

Operating entity, together with its 16 subsidiaries, engaged in the construction of solar parks and production and trading of solar equipment as well as management of solar parks.

Sky Solar (Canada) Ltd.

 

Canada

 

Operating entity, together with its seven subsidiaries, engaged in the development, construction and sale of solar parks

Neurlus Ltd.

 

Cyprus

 

Holding entity

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SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA

        The following selected consolidated statements of profit or loss and other comprehensive income (expense) data for the years ended December 31, 2011, 2012 and 2013 and the selected consolidated statements of financial position data as of December 31, 2011, 2012 and 2013 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. Our audited consolidated financial statements are prepared and presented in accordance with International Financial Reporting Standards, or IFRS, issued by International Accounting Standards Board. The following selected condensed consolidated statements of profit or loss and other comprehensive income (expense) data for the six months ended June 30, 2013 and 2014, and the selected condensed consolidated statements of financial position data as of June 30, 2014 have been derived from our unaudited interim consolidated financial statements included elsewhere in this prospectus.

        Our historical results for any period are not necessarily indicative of results to be expected for any future period. You should read the following selected consolidated financial data in conjunction with the consolidated financial statements and related notes and the information under "Management's Discussion and Analysis of Financial Condition and Results of Operations," both of which are included elsewhere in this prospectus. As an "emerging growth company" as defined in the JOBS Act and in reliance on the exemptions thereunder, we have included full-year financial information only as of and for the years ended December 31, 2011, 2012 and 2013.

Selected Consolidated Statements of Profit or Loss and other Comprehensive Income (Expense)

 
  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (US$ in thousands, except for per share data)
 

Revenue

    83,127     203,757     36,457     23,758     14,422  

Related parties

    55,893     133,471     5,565     2,884     130  

Non-related parties

    27,235     70,286     30,893     20,874     14,292  

Cost of sales and services

    (59,148 )   (142,433 )   (29,270 )   (20,299 )   (8,288 )
                       

Gross profit

    23,979     61,324     7,187     3,459     6,135  

Impairment loss on IPP solar parks

            (21,645 )   (2,148 )   (1,280 )

Impairment loss on receivables

    (182 )   (629 )   (3,521 )        

Impairment loss on amounts due from other related parties

                    (2,200 )

Selling expenses

    (488 )   (635 )   (848 )   (467 )   (492 )

Administrative expenses

    (15,293 )   (24,007 )   (25,030 )   (14,686 )   (9,103 )

Other operating income

    1,574     789     484     135     1,443  
                       

Profit (loss) from operations

    9,590     36,842     (43,373 )   (13,706 )   (5,498 )

Investment income

    514     955     960     259     229  

Other gains and losses

    (770 )   (1,570 )   (3,488 )   (3,280 )   (534 )

Finance costs

    (138 )   (1,132 )   (2,352 )   (1,173 )   (1,342 )

Other expenses

        (1,600 )   (2,266 )   (734 )   (665 )

Share of losses of associates

    (114 )                
                       

Profit (loss) before taxation

    9,082     33,495     (50,519 )   (18,635 )   (7,810 )

Income tax expense

    (1,991 )   (6,630 )   (3,372 )   (1,214 )   (416 )
                       

Profit (loss) for the period

    7,091     26,865     (53,891 )   (19,849 )   (8,226 )
                       
                       

Other comprehensive income (expense) that may be subsequently reclassified to profit or loss:

                               

Exchange differences on translation of financial statements of foreign operations

    (2,878 )   1,031     (352 )   (1,004 )   392  
                       

Total comprehensive income (expense) for the period

    4,213     27,896     (54,243 )   (20,853 )   (7,834 )
                       
                       

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  Year Ended December 31,   Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (US$ in thousands, except for per share data)
 

Earnings (loss) per share

                               

Basic

    0.02     0.08     (0.16 )   0.06     0.02  
                       
                       

Diluted

    0.02     0.08     (0.16 )   0.06     0.02  
                       
                       

Earnings (loss) per ADS(1)

                               

Basic

    0.16     0.64     (1.28 )   0.48     0.16  
                       
                       

Diluted

    0.16     0.64     (1.28 )   0.48     0.16  
                       
                       

Other Financial Data:

                               

Adjusted EBITDA(2)

    17,896     47,024     (12,038 )   (11,821 )   784  

(1)
Each ADS represents eight ordinary shares.

(2)
See "—Adjusted EBITDA" below.

Revenue Breakdown

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2013   2014  
 
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  %
  (US$ in
thousands)

  %
 

Electricity sales income(1)

            4,515     2.2     8,020     22.0     2,429     10.2     11,838     82.1  

Solar energy system sales

    64,055     77.1     180,231     88.5     21,462     58.9     18,842     79.3     1,201     8.3  

Other(2)

    19,072     21.9     19,010     9.3     6,975     19.1     2,487     10.5     1,383     9.6  
                                           

Total revenue

    83,127     100.0     203,757     100.0     36,457     100.0     23,758     100.0     14,422     100.0  
                                           
                                           

(1)
Represents revenue from selling electricity from IPP solar parks.

(2)
Our other business consists of (i) O&M services and (ii) sales of solar modules.

Selected Consolidated Statements of Financial Position

 
  As of December 31,   As of
June 30,
 
 
  2011   2012   2013   2014  
 
  (US$ in thousands)
   
 

Current assets

    237,881     238,691     122,861     76,580  

Non-current assets

    6,604     52,171     128,406     158,667  

IPP solar parks

        43,395     119,506     146,828  

Total assets

    244,485     290,862     251,267     235,247  

Current liabilities

    262,214     251,102     130,653     105,959  

Non-current liabilities

    2,516     23,382     22,509     27,807  

Total (deficit) equity

    (20,244 )   16,378     98,104     101,481  

Operating Data

 
  2011   2012   2013   Six
Months
Ended
June 30,
2014
 

Solar parks connected during the period(1)(2) (MW)

    0.1     56.3     80.8     8.6  

Total IPP solar parks in operation at the end of the period(3) (MW)

        23.9     43.2     51.8  

(1)
We consider a solar park connected to the grid when it has achieved connection and has all approvals needed to begin selling electricity through the grid.

(2)
This represents total solar parks connected for both solar energy system sales and selling electricity as an IPP.

(3)
Total solar parks in operation include solar parks operated by us and our historical project affiliates under our IPP business model.

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Adjusted EBITDA

        To provide investors with additional information regarding our financial results, we have disclosed in this prospectus Adjusted EBITDA, a non-IFRS financial measure. We present this non-IFRS financial measure because it is used by our management to evaluate our operating performance. We also believe that this non-IFRS financial measure provides useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

        Adjusted EBITDA, as we present it, represents profit or loss for the period before taxes, depreciation and amortization, adjusted to eliminate the impact of share-based compensation expense, interest expenses, impairment loss and IPO expenses.

        The use of the Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our financial results as reported under IFRS. Some of these limitations are: (a) although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; (b) Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; (c) Adjusted EBITDA does not reflect the potentially dilutive impact of equity-based compensation; (d) Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and (e) other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled measures differently, which reduces their usefulness as a comparative measure. Because of these and other limitations, you should consider Adjusted EBITDA alongside our other IFRS-based financial performance measures, such as profit (loss) for the period and our other IFRS financial results. The following table presents a reconciliation of Adjusted EBITDA to profit (loss) for the period, the most directly comparable IFRS measure, for each of the periods indicated:

 
  As of and for the Year Ended
December 31,
  As of and for the
Six Months Ended
June 30,
 
 
  2011   2012   2013   2013   2014  
 
  (US$ in thousands)
   
   
 

Profit (loss) for the period

    7,091     26,865     (53,891 )   (19,849 )   (8,225 )
                       

Adjustments:

                               

Income tax expense

    1,991     6,630     3,372     1,214     416  

Depreciation of property, plant and equipment

    331     305     283     209     346  

Depreciation of solar parks

        2,474     4,395     1,110     2,403  

Amortization

    35     100     101     60     86  

Share-based payment charged into profit or loss

    8,128     7,352     4,576     1,422     275  

Interest expenses

    138     1,132     2,352     1,173     1,342  

Impairment loss on IPP solar parks

            21,645     2,148     1,280  

Impairment loss on receivables

    182     629     3,521          

Impairment loss on amounts due from other related parties

                    2,200  

IPO expenses

        1,537     1,608     692     661  
                       

Adjusted EBITDA

    17,896     47,024     (12,038 )   (11,821 )   784  
                       
                       

        We do not consider historical Adjusted EBITDA to be representative of future Adjusted EBITDA, as our revenue model changed from primarily generating revenue from selling solar energy systems to primarily generating revenue from selling electricity in the fourth quarter of 2013. We believe that Adjusted EBITDA is an important measure for evaluating the results of our IPP business.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section entitled "Selected Consolidated Financial Data" and our consolidated financial statements and the related notes included elsewhere in this prospectus. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this prospectus.

Overview

        We have successfully developed and operated solar parks on a global basis. Since we began our business in 2009, we have focused on downstream services for the development, construction and operation of solar parks. As of the date of this prospectus, we have completed 198 solar parks with an aggregate capacity of 181.0 MW in seven countries including Greece, Japan, Bulgaria, the Czech Republic, Spain, Canada and Germany. Under our IPP revenue model, we currently own and operate 53.9 MW of solar parks in Japan, Greece, Bulgaria, the Czech Republic, Canada and Spain.

        We primarily derive revenue from selling solar energy systems to off-takers and electricity to the transmission grid. In the past, we have generated additional revenue by selling PV modules we purchased from third-party manufacturers. We have been strategically reducing the sale of our solar energy systems in favor of our IPP business. Purchasers of our solar energy systems included investor-owned utilities, independent power developers and producers and commercial and industrial companies. Our IPP solar parks generate recurring revenue by selling electricity to the power grid over the operational lifetime of the solar parks. We began to derive a majority of revenue from selling electricity in the fourth quarter of 2013.

        Our operations have historically been focused on Greece, Bulgaria, Canada, Japan and the Czech Republic. We also derived revenue from Germany, Spain and Italy. As a result of the reductions of government incentives for the PV industry in Europe, we do not expect these to be amongst our primary target markets in the near future. We plan to expand our business operations in Chile, Uruguay, Japan, Canada and South Africa. We expect such expansion to further diversify our revenue base internationally.

        Our revenue was US$83.1 million, US$203.8 million, US$36.5 million and US$14.4 million in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. Our gross profit was US$24.0 million, US$61.3 million, US$7.2 million and US$6.1 million in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. We generated profit of US$7.1 million and US$26.9 million and incurred losses of US$53.9 million in 2011, 2012 and 2013, respectively. We incurred losses of US$8.2 million in the six months ended June 30, 2014. The decrease in revenue in 2013 and the six months ended June 30, 2014 was primarily due to shifting our focus from selling solar energy systems to selling electricity as an IPP. Our IPP solar parks provide attractive long-term recurring revenue from selling electricity. From 2012 to 2013, our revenue from selling electricity from IPP solar parks grew from US$4.5 million to US$8.0 million, representing 2.2% and 22.0% of our revenue, respectively. Our revenue from selling electricity grew from US$2.4 million in the six months ended June 30, 2013 to US$11.8 million in the same period of 2014, representing 10.2% and 82.1% of our revenue, respectively. The total capacity of our IPP solar parks was 23.9 MW, 43.2 MW and 51.8 MW, and the total carrying value of our IPP solar parks was US$43.4 million, US$119.5 million and US$146.8 million as of December 31, 2012, December 31, 2013 and June 30, 2014, respectively.

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Factors Affecting Our Results of Operations

        We believe the most significant factors that directly or indirectly affect our overall growth, financial performance and results of operations include:

Market demand for and price of PV power

        Our revenue and profitability depend substantially on the demand for solar parks, which is driven by the economics of these systems, including the availability and size of government subsidies and economic incentives, as well as environmental concerns, energy demand, government support and cost improvements in solar power. According to NPD Solarbuzz, the world PV market in terms of new annual installations grew at a CAGR of 65% from 2007 to 2012. Under NPD Solarbuzz's "Most Likely" scenario, the world PV market in terms of annual installations is expected to grow from 29.0 GW in 2012 to 66.0 GW in 2017, representing a five-year CAGR of 18%, providing PV project developers like us with significant opportunities to continue to grow our business.

        A number of markets in the PV industry continue to be affected by government subsidies and economic incentives. A number of countries have introduced highly favorable FIT price support regimes. For example, Japan, which has a high demand for power and low domestic fossil fuel reserves, faces relatively high energy costs. As a result, the Japanese government has introduced an attractive FIT price support regime to encourage the development of solar parks. Other countries, such as Greece, Bulgaria, the Czech Republic and Germany, have reduced their support for the PV industry in light of the global economic crisis. While governments generally aim to ratchet down PV subsidies over time to reflect the generally decreasing system costs of solar parks, this decrease is often offset by the decreasing costs of PV systems. To foster our growth, we have shifted our focus away from countries with less favorable subsidy regimes to countries with more favorable subsidy regimes.

        In the long term, as PV technology advances and average systems costs of solar parks decrease, we expect the spot market price of electricity in a growing number of countries to become sufficiently high that solar parks can be economically developed without the need for government subsidies, a condition known as "grid parity". As the PV industry becomes more competitive against other forms of energy and increasing grid parity drives increased demand for solar parks, we expect our costs of sales to decrease and our revenue and profitability to increase. In light of these favorable conditions and our increased access to financing, we will continue to increase the proportion of solar parks that we own and operate as IPP solar parks. In the fourth quarter of 2013 and the six months ended June 30, 2014, selling electricity from IPP solar parks has been our largest revenue stream, growing from 22.0% of our revenue in 2013 to 82.1% in the six months ended June 30, 2014.

Access to adequate financing with competitive interest rates and terms

        We require large capital investments to expand our project pipeline. Historically, apart from bank borrowing, shareholder contributions and our own operating cash flows, we have relied on financing for the construction of large solar parks, including project funding, pre-financing agreements with off-takers and supply-chain financing. Construction costs are funded by our working capital and bank loans. We generally negotiate favorable credit terms with our equipment suppliers or EPC contractors, such that payment is not due until several months following the completion of construction and connection. Following connection, we typically pledge solar park assets and raise debt financing in order to

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optimize the project's capital structure, pay our contractors and replenish our working capital. Such debt financing usually have a term of over 15 years.

        As an international PV project developer with a strong track record, we have received financing from a number of global financial institutions. See "Business—PV Project Funding". Project funding for our solar parks is typically obtained from local banks in countries with well-developed appetite for renewable energy investments, such as the Czech Republic, the United States, Canada, Japan, Spain and South Africa. For solar parks in countries with more constrained access to local debt financing, such as Eastern Europe, Latin America and other emerging markets, we seek to arrange debt financing by leveraging our strong relationships with international financing sources. We have also established affiliates with other entities who provide financing or guarantees to the affiliate to assist with long-term debt financing.

        As our business continues to grow and as we develop solar parks as an IPP, our success depends on securing sufficient amounts of financing on suitable terms within the time periods required. We expect to incur significantly more borrowings from banks or other institutions. Fluctuations in interest rates and currencies, for which we currently do not hedge our exposure, may impact our cost of financing and affect our financial condition and results of operations.

Our revenue model and the geographic mix of our project portfolio

        We have historically developed solar parks and derived revenue from two revenue models. Under our solar energy system sales business, we sell permits, provide EPC services, and build and sell commercially operational solar parks. Under our IPP business, we own and operate solar parks and generate revenue from selling electricity. The revenue model we utilize affects our revenue, profitability and capital requirements.

        In 2011, 2012, 2013 and the six months ended June 30, 2014, we derived 77.1%, 88.5%, 58.9% and 8.3% of our total revenue for the respective periods from selling solar energy systems. We derived our solar energy system sale revenue primarily from our historical project affiliates before 2014, which, in aggregate, represented 58.7%, 65.5% and 3.3% of our revenue in 2011, 2012, 2013, respectively. In the six months ended June 30, 2014, we did not derive any solar energy system sales revenue from our affiliates.

        In early 2013, we began to shift our strategy from selling solar energy systems to selling electricity from IPP solar parks in order to internalize more value from project development and generate recurring revenue and cash flow. As of June 30, 2014, we had a total of 51.8 MW of IPP solar parks in operation with a carrying value of US$109.1 million, including a total of 18.3 MW of IPP solar parks with a carrying value of US$35.8 million we initially constructed and sold to ChaoriSky Solar but subsequently repurchased to settle outstanding receivables. Most of the PPAs for our IPP solar parks fix the FIT for our IPP solar parks for 20 years. We expect to generate attractive long-term returns and stable cash flows from selling electricity from IPP solar parks. Building and operating IPP solar parks also require large amounts of initial capital investment and strong financing capabilities.

        In the fourth quarter of 2013, we began to derive a majority of our revenue from selling electricity to the power grid as an IPP. In 2012, 2013 and the six months ended June 30, 2014, we derived 2.2%, 22.0% and 82.1% of our revenue from electricity sales from IPP solar parks, respectively. As we grow our IPP business, we will also increase the number of our IPP solar parks. The carrying value of our IPP solar parks was US$43.4 million, US$119.5 million and US$146.8 million as of December 31, 2012 and 2013 and June 30, 2014, respectively.

        Although we intend to focus on developing IPP solar parks, we will continue to sell solar energy systems from time to time to take advantage of attractive market opportunities. As a result, we may generate more of our revenues from the one-time sale of solar parks for certain periods.

        Our results of operations and profitability may also be affected by our project mix in terms of the geographic locations of our solar parks, as different countries tend to have different regulatory regimes

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and investment return profiles. We generally expect higher gross margins in countries with high FIT, such as Japan and Canada. In addition, our cost of financing depends on the rates of return on other assets in the respective markets. Investors from countries with high liquidity and low interest rates, such as Japan, are generally willing to accept single-digit rates of return on our solar parks, which should allow us to sell our solar parks for higher prices and higher margins.

        See "Risk Factors—Risks Relating to our Business and Industry—Our limited operating history, especially with large-scale IPP solar parks, may not serve as an adequate basis to judge our future prospects and results of operations."

EPC costs for PV systems

        EPC costs include the costs of construction, connection costs and procurement costs. The three most significant component contributors to EPC costs are the costs of modules, inverters and mounting systems. Our supplier- and technology-agnosticism, our strong supply chain management and our strong relationships with the equipment suppliers have enabled us to historically purchase equipment at relatively competitive technical performance, prices, terms and conditions.

        In recent years, the prices of modules, inverters and mounting systems have decreased as a result of oversupply and improving technology. As the costs of our components have decreased, our solar parks became more cost competitive and our profitability increased. As a result, our solar parks have begun to offer electricity at increasingly competitive rates, which increases the attractiveness of our investment return and our revenue. We expect the cost of components will continue to gradually decrease, however, newly commercialized PV technologies are expected to further drive down EPC costs and increase the energy output of PV systems, which will further increase the competitiveness of our solar parks and allow solar energy to achieve grid-parity in more and more markets.

        We expect that EPC costs will continue to impact our costs and financial results.

Subsidies for solar parks and spot market electricity tariff

        We expect electricity sales from IPP solar parks to represent an increasingly significant proportion of our revenue going forward. In 2012, 2013 and the six months ended June 30, 2014, we derived 2.2%, 22.0% and 82.1% of our total revenue from electricity sales from our IPP solar parks, respectively. Revenue generated from selling electricity from our IPP solar parks represented a majority of our revenue in the fourth quarter of 2013 in the six months ended June 30, 2014. As of the date of this prospectus, the total capacities of our IPP solar parks in operation in Greece, Japan, the Czech Republic, Bulgaria, Canada and Spain were 23.0 MW, 18.7 MW, 5.6 MW, 3.7 MW, 2.0 MW and 0.9 MW, respectively. Electricity sales will reflect the price of electricity, the capacity of our PV plants and solar radiation in the local area. The price of electricity in different countries is either (i) fixed through PPAs or (ii) variable and determined by the spot market. As of June 30, 2014, the percentage of our owned capacity for which the price of electricity was fixed through PPAs was 98.2% while the percentage of owned capacity for which the price of electricity was variable and determined by the spot market was 1.8%

        Historically, we have derived our electricity income from markets where electricity is sold through PPAs backed by FIT price support schemes. The price of electricity is specified by laws or contractual terms under our PPAs and is fixed for the life of the PPAs, most of which have a term of 20 years. Changes in the FIT price support schemes or PPAs in such countries are generally only applied prospectively, and consequently do not affect our solar parks in operation for the remaining life of the PPA. Nevertheless, a few jurisdictions, including Bulgaria, Greece and Spain, have proposed or enacted laws that have imposed fees on or effected changes to finalized PPAs or FIT price support schemes during the contractual term. We have been deriving IPP revenue directly through solar parks that we hold in Japan, the Czech Republic and Greece and investment income indirectly through IPP solar parks held by our historical project affiliates in which we have minority equity positions in Bulgaria.

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Notwithstanding the changes in electricity prices, solar parks in such markets are still expected to generate relatively stable revenue. We primarily plan to expand our IPP portfolio in Japan, Canada, Latin America and South Africa, where electricity prices are fixed by PPAs for periods varying from 20 years to 30 years.

        In countries where the price of electricity is sufficiently high that solar parks can be profitably developed without the need for government subsidies, a condition known as "grid-parity", solar parks lacking fixed-price PPAs are subject to the spot market price of electricity. We intend to expand our IPP portfolio significantly in markets that have reached grid parity, such as Chile which reached grid parity in 2011. We expect that a certain portion of our solar parks in Chile will not have signed PPAs, while others will enter into commercial PPAs with large industrial end-consumers. IPP revenue from such solar parks will fluctuate with Chile's spot electricity prices.

        Revenue for solar parks will also fluctuate with the electricity spot market after the expiration of any PPA or FIT price support schemes, unless renewed.

        The market price of electricity can be subject to significant fluctuations and can be affected by drivers such as the cost of traditional fossil fuels used for electricity generation, the discovery of new fossil fuel sources, additional electricity generation capacity, additional electric transmission and distribution lines, technological or regulatory changes, increased energy conservation or for a number of other reasons.

        See "Risk Factors—Risks Relating to our Business and Industry—The reduction, modification or elimination of government subsidies and economic incentives may reduce the economic benefits of our existing solar parks and our opportunities to develop or acquire suitable new solar parks" and "—Decreases in the spot market price of electricity could harm our IPP revenue and reduce the competitiveness of solar parks in grid-parity markets."

Our project development and operations capabilities

        Our financial condition and results of operations depend on our ability to successfully continue to develop new solar parks and operate our existing solar parks. As we continue to grow, we expect to build and manage a greater number of large-scale solar parks and to enter new geographies, which we expect to present additional challenges to our internal processes, external construction management, working capital management and financing capabilities. Our financial condition, results of operations and future success depend, to a significant extent, on our ability to continue to identify suitable sites, expand our pipeline of solar parks with attractive returns, obtain required regulatory approvals, arrange necessary financing, manage the construction of our solar parks on time and within budget and successfully operate solar parks.

Major Components of Our Results of Operations

Revenue

        We have historically derived our revenue primarily from selling solar energy systems, electricity and PV modules. Under our solar energy system sales business, we sell permits, provide EPC services and build and sell commercially operational solar parks. We began to generate electricity income from IPP solar parks in 2012 and have been generating an increasing proportion of our revenue from our IPP solar parks. In early 2013, we began to strategically reduce the sales of our solar energy systems in favor of selling electricity from IPP solar parks in order to internalize more value from project development and generate recurring revenue and cash flow. As of June 30, 2014, we had a total of 51.8 MW of IPP solar parks in operation with a carrying value of US$109.1 million, including a total of 18.3 MW of IPP solar parks with a carrying value of US$35.8 million that we initially constructed and sold to ChaoriSky Solar, but subsequently repurchased to settle outstanding receivables. We also began to generate revenue from the provision of operations and maintenance service in 2013. We derived a majority of revenue from selling electricty from IPP solar parks in the fourth quarter of 2013 and the

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six months ended June 30, 2014. However, as a result of this shift in business strategy, our revenue decreased substantially from US$203.8 million in 2012 to US$36.5 million in 2013, and from US$23.8 million in the six months ended June 30, 2013 to US$14.4 million in the same period of 2014. We may continue to sell our solar parks from time to time to increase liquidity, reduce liabilities, optimize our project portfolio and take advantage of attractive market opportunities.

        Our solar energy system sales business consists of (i) sale of permits, (ii) sourcing and sales of solar modules as part of the EPC services, (iii) construction services and (iv) building and sale of solar parks.

        The following table summarizes the solar energy systems we sold during the periods indicated:

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2014  
 
  Capacity
(MW)
  Number of
Solar Parks
  Capacity
(MW)
  Number of
Solar Parks
  Capacity
(MW)
  Number of
Solar Parks
  Capacity
(MW)
  Number of
Solar Parks
 

Europe

                                                 

Greece

            8.5     7     64.6     99          

Bulgaria

            42.9     13                  

Czech Republic

                                 

Spain

                                 

Germany

                                 

North America

                                                 

Canada

    0.1     1     2.9     12     2.6     7     0.2     1  

Asia

                                                 

Japan

                    1.0     1          
                                   

Total

    0.1     1     54.3     32     68.2     107     0.2     1  
                                   
                                   

        The following table sets forth a breakdown of our revenue streams for the periods indicated:

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2013   2014  
 
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  %
  (US$ in
thousands)

  %
 

Electricity sales income(1)

            4,515     2.2     8,020     22.0     2,429     10.2     11,838     82.1  

Solar energy system sales

    64,055     77.1     180,231     88.5     21,462     58.9     18,842     79.3     1,201     8.3  

Other(2)

    19,072     21.9     19,010     9.3     6,975     19.1     2,487     10.5     1,383     9.6  
                                           

Total revenue

    83,127     100.0     203,757     100.0     36,457     100.0     23,758     100.0     14,422     100.0  
                                           
                                           

(1)
Represents revenue from selling electricity from IPP solar parks.

(2)
Our other business consists of (i) O&M services and (ii) sales of solar modules.

        In 2011, 2012, 2013 and the six months ended June 30, 2014, a significant portion of our revenue from external customers was derived from selling solar energy systems located in Greece and Bulgaria, which accounted for an aggregate of 67.2%, 84.1%, 55.2% and nil of our revenue for the respective periods.

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        The following table sets forth a breakdown of our revenue by geographical region during the periods indicated:

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2013   2014  
 
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  (%)
  (US$ in
thousands)

  %
  (US$ in
thousands)

  %
 

Europe

                                                             

Greece

    21,223     25.5     129,714     63.7     18,449     50.6     8,162     34.4     6,432     44.6  

Bulgaria

    34,669     41.7     41,667     20.4     1,664     4.6     7,411     31.2     455     3.2  

Germany

    10,701     12.9     18,244     9.0     767     2.1     370     1.6     129     0.9  

Czech

            3,958     1.9     3,571     9.8     1,655     7.0     2,280     15.8  

Spain

    1,576     1.9     591     0.3     670     1.8     227     1.0     178     1.2  

Italy

            111     0.1     267     0.7     263     1.1          

North America

                                                             

Canada

    9,949     12.0     8,812     4.3     4,572     12.5     1,143     4.8     1,164     8.0  

Asia

                                                             

Japan

    5,009     6.0     660     0.3     6,497     17.9     4,527     19.1     3,785     26.3  
                                           

Total revenue

    83,127     100.0     203,757     100.0     36,457     100.0     23,758     100.0     14,422     100.0  
                                           
                                           

        We have historically derived a substantial portion of our revenue in a given reporting period from a limited number of solar parks from a limited number of key purchasers of our solar energy system. Our key clients changed from period to period, as we changed our geographic focus.

        The following table sets forth revenue from our clients contributing over 10% of our total revenue during the periods indicated:

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2013   2014  
 
  (US$ in
thousands)

  (% of
total
revenue)

  (US$ in
thousands)

  (% of
total
revenue)

  (US$ in
thousands)

  (% of
total
revenue)

  (US$ in
thousands)

  (% of
total
revenue)

  (US$ in
thousands)

  (% of
total
revenue)

 

Client A(1)

    29,256     35.2     87,291     42.8     *     *     2,776     11.7     *     *  

Client B(2)

    26,637     32.0     *     *     *     *     *     *     *     *  

Client C

    *     *     37,910     18.6     11,555     31.7     11,609     48.9     *     *  

Client D(3)

            40,676     20.0     *     *     *     *     *     *  

Client E

    *     *     *     *     *     *     *     *     5,368     37.2  

Client F

    *     *     *     *     *     *     *     *     2,131     14.8  

Client G

    *     *     *     *     *     *     *     *     1,990     13.8  

Client H

    *     *     *     *     *     *     3,966     16.7     *     *  
                                           

Total(4)

    55,893     67.2     165,877     81.4     11,555     31.7     18,350     77.2     9,488     65.8  
                                           
                                           

*
Revenue from such client represented less than 10% of total revenue during the period.

(1)
ChaoriSky Solar, a related party affiliate which we formed for PV project co-investment with a module manufacturer and in which we held a 30% equity interest until November 2013. We do not anticipate engaging ChaoriSky Solar or its parent company in any business going forward.

(2)
RisenSky Solar, a related party affiliate which we formed for PV project co-investment with a module manufacturer and in which we hold a 30% equity interest.

(3)
China New Era International Limited, a related party affiliate which Sky Solar Holdings Co., Ltd., a former shareholder of Sky Power Group Ltd., formed for PV project co-investment with a China state-owned-enterprise and in which Sky Solar Holdings Co., Ltd. holds a 49% equity interest.

(4)
Total is total amount from clients who individually represented more than 10% of total revenue.

        A number of our largest clients were historical project affiliate entities, formed with partners who were interested in our permits and EPC services and looking to enter into joint ownership of a solar park to increase our long-term interest in the solar parks. As we increase the proportion of revenue we derive from our IPP business, as compared to our solar energy system sales, we have derived more revenue from third parties and we expect to continue to derive our revenue from a diverse project portfolio, which will decrease our reliance on our related party affiliates or any other given client.

        See "Risk Factors—Risks Related to Our Business and Industry—We have relied on our historical project affiliates to generate a significant portion of our revenue" and "Related Party Transactions."

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Cost of sales and services

        Our cost of sales in developing solar energy systems for sale primarily consists of (i) equipment costs, consisting primarily of costs for PV modules and balance-of-system components, such as inverters and mounting systems; (ii) development costs, such as fees paid for permits, site control, grid connection and transmission upgrade, and development staff and due diligence costs; (iii) engineering and construction related costs, including fees paid to third-party contractors, and project management costs; and (iv) overhead costs.

        Under our IPP business, we capitalize the equipment costs, development costs, engineering and construction related costs and interests incurred. Our cost of sales with regards to our IPP solar parks will primarily be a result of the depreciation of these capitalized costs, as well as tax, insurance and operating and management costs. Certain economic incentive programs, such as FIT regimes, generally include mechanisms that ratchet down incentives over time. As a result, we seek to connect our IPP solar parks to the local power grids and commence operations in a timely manner to benefit from more favorable existing incentives. Therefore, we generally seek to make capital investments during times when incentives are most favorable.

        We generally incur substantial expenditures for a solar park in a given period only to recognize revenue for the solar parks in a later period, especially for our IPP business and business of building and transferring solar parks. If regulatory approvals are delayed or denied or if construction, module delivery, financing, warranty or operational issues arise, the reporting of revenue may be further delayed and or impairment charges may be incurred. Furthermore, we may pursue larger solar parks in the future, which may also exacerbate such timing effects.

        The development costs for our solar parks vary depending on, among other things, whether we pursue solar parks as a primary developer or a secondary developer, the locations of solar parks, and the regulatory environment and competitive landscape in the local markets. As a secondary developer, we acquire permits on the secondary market and therefore incur acquisition costs instead of permit development costs.

        Our largest supplier during 2011, 2012, 2013 and the six months ended June 30, 2014 accounted for 12.4%, 17.8%, 14.0% and 20.2% of our total cost of sales, respectively. Cost of sales attributable to our top five suppliers in 2011, 2012, 2013 accounted for 24.8%, 40.6%, 42.5% and 67.4% of our total cost of sales, respectively.

Gross profit

        Gross profit is equal to revenue less cost of sales. Gross profit margin is equal to gross profit divided by revenue. Our gross profit margin depends on a combination of factors, including primarily the geographic distribution of the solar parks sold, the mix of projects and services sold during the reporting period, the prices at which the solar parks and services are sold, costs of PV modules and balance-of-system components, costs of services outsourced to third-party contractors and management costs (including share-based compensation costs) attributable to project development. Our gross profit margin was 28.8%, 30.1%, 19.7% and 42.5% for 2011, 2012, 2013 and the six months ended June 30, 2014, respectively.

        Our gross profit can also vary from one region to another. We would generally expect higher gross margins in countries with high FIT, such as Japan and Canada. In addition, off-takers for our solar parks will compare the returns for holding our solar parks with returns on other assets in their respective markets. Investors from countries with high liquidity and low interest rates, such as Japan, are generally willing to accept single-digit rates of return on our solar parks, which should allow us to sell our solar parks for higher prices and higher margins.

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Impairment loss on IPP solar parks

        We recorded an impairment loss of US$21.7 million and US$1.3 million on IPP solar parks in 2013 and in the six months ended June 30, 2014, respectively, which were triggered when the Greek government passed a law in April 2014 to reduce the FIT in effect on existing PPAs by roughly 30%, placing a discount on electricity sold in 2013.

Impairment loss on receivables

        We recorded an impairment loss on receivables due from counterparties with financial difficulties or that had defaulted in repayments.

Impairment loss on amounts due from other related parties

        We recorded an impairment loss of US$2.2 million on the US$8.0 million due from other related parties in the six months ended June 30, 2014 as a result of the decrease in collectability of certain amounts due from China New Era International Limited, or China New Era, one of our related parties. For a further discussion of our impairment loss for amounts due from China New Era, see "Related Party Transactions—Transactions with Certain Affiliates and Shareholders—Transactions with China New Era International Limited." We made the determination on the amount of the impairment loss based on our on-going communication with China New Era on the collectability of the receivables. We believe the remaining amount due is recoverable due to the following reasons: (i) Mr. Su, our founder and executive chairman, who controls 49% of the shares of the China New Era, has access to the financial and operating information of China New Era, based on which, we believe that China New Era has the ability and intention to repay the debt, and (ii) we intend to offer a discount on the amounts due from China New Era as requested by China New Era, which we believe would expedite the repayment by China New Era. The impairment is the amount of discount we intend to offer.

Selling expenses

        Selling expenses primarily consist of expenses and costs related to labor and exhibition fees.

Administrative expenses

        Administrative expenses consist primarily of expenses related to employee salaries and benefits, professional fees and expenses, share-based compensation expense, office, rental and travel expenses and other expenses.

Investment and other income

        Investment and other income consists primarily of interest income and other income.

Other gains and losses

        Other gains and losses primarily consist of gains and losses from foreign exchange conversion and gains from disposal of subsidiaries.

Finance costs

        Finance costs primarily consist of interest on bank loans and the balance between us and our former shareholder, Sky Solar Holdings Co., Ltd.

Other expenses

        Other expenses consist primarily of legal and professional fees in connection with the preparation for our initial public offering and other miscellaneous expenses.

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Income tax expense

        Our income tax expense represents the sum of current income tax and deferred tax.

        We are a limited liability company incorporated in the Cayman Islands. Under the laws of the Cayman Islands, we are not subject to income or capital gains tax in the Cayman Islands. Additionally, dividend payments made by us are not subject to withholding tax in the Cayman Islands.

        Under the laws of the British Virgin Islands (BVI), our BVI subsidiary is not subject to income or capital gains tax in the British Virgin Islands. Additionally, dividend payments made by our BVI subsidiary to us are not subject to withholding tax in the British Virgin Islands.

        Income tax of Bulgaria, Germany and Hong Kong is calculated at 10%, 30% and 16.5%, respectively, of the estimated assessable profit of the respective subsidiaries for the periods presented. Income tax of Greece is calculated at 20%, 20%, 26% and 26% of the estimated assessable profit of the respective subsidiaries for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2014, respectively. Income tax of Canada for the year ended December 31, 2011 is calculated at 28.0% and the two years ended December 31, 2013 and the six months ended June 30, 2014 is calculated at 26.5% of the estimated assessable profit of the respective subsidiaries. Income tax of Japan is calculated at 40.1%, 38.0%, 38.0% and 38.0% of the estimated assessable profit of the respective subsidiaries for the years ended December 31, 2011, 2012 and 2013 and the six months ended June 30, 2014, respectively. Taxation arising in other jurisdictions is calculated at the rates prevailing in those jurisdictions.

        Our effective income tax rates were 21.9%, 19.8%, negative 6.7% and negative 5.3% in 2011, 2012, 2013 and the six months ended June 30, 2014, respectively. The negative effective income tax rate in 2013 and the six months ended June 30, 2014 was primarily due to the losses we incurred in certain European countries and expenses that were not deductible for tax purposes.

Critical Accounting Policies

        We have identified below the accounting policies that we believe are the most critical to the presentation of our consolidated financial information. These accounting policies require subjective or complex judgments by our management, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. The estimates and assumptions are based on our historical experience and various other factors that we believe are reasonable under the circumstances, the results of which form the basis of making judgments about matters that are not readily apparent from other sources. We review our estimates and underlying assumptions on an on-going basis.

Revenue recognition

        Our revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods sold and services provided in the normal course of business, net of discounts and sales related taxes, if any.

        We have historically derived revenue primarily from selling solar energy systems and selling electricity generated from our IPP solar parks. We sell solar energy systems as "Pipeline + EPC" projects, where we obtain permits required for pipeline projects and provide engineering, construction and procurement services, or as "BT projects", where we develop permits, build and sell commercially operational solar parks. We have also generated revenue by trading modules to third parties and providing maintenance services for solar parks.

        The provision of Pipeline + EPC services involves application of permits, sourcing of solar modules and provision of construction services.

        We either apply for the permits required to construct and operate solar parks ourselves or acquire the permits through the acquisition of equity interests in project companies, which are typically formed

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for the specific purpose of holding such permits. In the course of providing Pipeline + EPC services, we sell the permits to customers through the disposal of project companies holding the relevant permits. Revenue from disposing project companies holding permits is recognized when we transfer equity interests in the relevant project companies to customers, at which time control is transferred.

        We, on the other hand, enter into separate contracts with suppliers for sourcing of modules for project companies if it is requested by the customers. We recognize revenues from modules sourced when the modules have been delivered and accepted by customers and installation is completed. We recognize revenues from provision of construction service in accordance with our accounting policies for construction contract.

Revenue based on the percentage of completion and assessment of the outcome of construction contracts

        Where the outcome of a construction contract can be estimated reliably, except where this would not be representative of the stage of completion, revenue and costs are recognized by reference to the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

        Where the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred that it is probable will be recoverable. Contract costs are recognized as expenses in the period in which they are incurred.

        Based on the percentage of completion method, we recognized construction revenue of US$25.6 million, US$121.1 million and US$17.5 million in the years ended December 31, 2011, 2012 and 2013, respectively, and US$1.2 million in the six months ended June 30, 2014. This construction revenue could be estimated reliably, and was representative of the stage of completion.

        When it is probable that total contract costs will exceed total contract revenue, we recognize the expected loss as an expense.

        When a contract covers a number of assets, the construction of each asset is treated as a separate contract when separate proposals have been submitted for each asset, each asset has been separately negotiated and the costs and revenue of each asset can be separately identified. A group of contracts, performed concurrently or in a continuous sequence, is treated as a single construction contract when the contracts were negotiated as a single package and they are so closely inter-related that they constitute a single project with an overall profit margin.

        Where contract costs incurred to date plus recognized profits less recognized losses exceed progress billings, we record the surplus as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognized profits less recognized losses, we record the surplus as amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated statement of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the client are included in the consolidated statement of financial position under trade and other receivables.

IPP solar parks

        IPP solar parks include completed solar parks held for generation of electricity income and solar parks under development with an intention to be held for generation of electricity income. Solar parks under development will be transferred to completed solar parks upon completion and when they are ready for intended use. IPP solar parks are stated in the consolidated statements of financial position at cost less subsequent accumulated depreciation of completed solar parks and subsequent accumulated impairment losses, if any.

        Costs include expenditures capitalized during the course of obtaining permits required for solar parks (for example legal expenses, consultancy fees, staff costs and other costs), cost of land on which solar parks are developed or to be developed and costs of construction, such as costs for procurement of solar module, invertors and other equipment, costs for designing, engineering and installation and other direct costs capitalized in the course of construction. Such costs are capitalized starting from the point in time it is determined that development of the IPP solar park is probable.

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        Depreciation of completed solar parks commences once the solar parks are successfully connected to grids and begin generating electricity. Depreciation is recognized, so as to write off the cost of assets (other than solar parks under development), over their estimated useful lives of the solar parks (less residual value if any), using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

        IPP solar parks are derecognized upon disposal or when there are no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of solar parks is determined as the difference between the sales proceeds and the carrying amount of the solar parks and is recognized in profit or loss. The IPP solar parks are reclassified as non-current assets held for sale when certain criteria are met with our intention to sale.

        At the end of each reporting period, we review the carrying amounts of its IPP solar parks to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, we determine the extent of the impairment loss (if any) and record the recoverable amount of the asset.

        We define each operational solar park generating electricity income as a cash generating unit, or CGU, for impairment purposes. We test a CGU for impairment whenever events or changes in circumstance indicate that the carrying amount of the CGU may not be recoverable. These events or changes in circumstances include:

        We have nil, 15, 39 and 46 CGUs as at December 31, 2011, 2012 and 2013 and June 30, 2014, respectively. In 2012, no indicators of impairment were identified for any CGU. In 2013, 17 of the 39 CGUs located in Greece showed indicators of impairment and were tested for impairment. The other 22 CGUs with no indicators of impairment were located in Japan, Spain and Czech. After performing the impairment test, we determined that 13 of the CGUs were impaired and recorded an impairment loss of US$21.6 million. The total remaining carrying value after impairment for the 13 CGUs was EUR28.6 million (equivalent to approximately US$39.5 million based on the historical exchange rate on the date of settlement of relevant transactions) as of December 31, 2013. The total carrying amount of the 4 CGUs that passed the impairment testing was US$4.6 million, and the carrying amount of each CGU was less than the respective estimated recoverable amount by approximately 5%.

        The recoverable amounts of the CGUs are determined from value in use calculations. The key assumptions for the value in use calculation consisted of discount rate, estimated net electricity income and direct costs and growth rate. The discount rate and growth rate used in the impairment testing was 13.6% and 0%, respectively for each of the solar parks, as all of these solar parks subject to impairment testing have similar economic characteristics. The solar parks in Greece are built with the same brand of solar panels and equipment. They are also affected by the same FIT policies, cost structures, tax schemes, capital structures and risk profiles.

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        We performed the following sensitivity analysis to test the exposure of the 17 IPP solar parks with indicators of impairment to fluctuations in the discount rate, estimated net change in electricity income and direct costs and growth rate during the useful lives of IPP solar parks. We assume, for purposes of this analysys, that the other assumptions during the forecasted period are constant.

Assumptions
  Change in assumption   Total Increase/Decrease in the
amount of impairment charges

Discount rate

  Increase/decrease by 1%   Increase/decrease US$2.3 million

Estimated net change in electricity income and direct costs

  Increase/decrease by 5%   Decrease/increase US$1.7 million

Growth rate

  Increase/decrease by 1%   Decrease/increase US$2.8 million

        During the six months ended June 30, 2014, we have acquired three CGUs located in Greece which showed indicators of impairment at the period end, while other CGUs located in Greece, Japan, Spain and the Czech Republic do not show any indicators of impairment. After we performed the impairment tests on these three CGUs, we recorded an impairment loss of US$1.3 million. The total remaining carrying value after impairment for the three CGUs was EUR2.0 million (equivalent to approximately US$2.6 million based on the historical exchange rate on the date of settlement of relevant transactions) as of June 30, 2014.

        For IPP solar parks where customers purchase electricity from us under PPAs in certain countries, facts and circumstances of the FIT policies were changed mandatorily which triggered re-assessment on accounting for these arrangements. As a result, the newly issued FIT policies may indicate that it is remote that one or more parties other than the purchaser will take more than an insignificant amount of the output or other utility that will be produced or generated by the asset during the term of the arrangement, and the price that the purchaser will pay for the output is neither contractually fixed per unit of output nor equal to the current market price per unit of output as of the time of delivery of the output. These agreements will be accounted for as operating leases under such circumstance pursuant to IFRIC 4, Determine whether an Arrangement Contains a Lease, and IAS 17, Leases. Revenue is recognized based upon the amount of electricity delivered as determined by remote monitoring equipment at rates specified under the contracts, assuming all other revenue recognition criteria are met. We present the rental income from operating leases of these IPP solar parks as electricity generation income in revenue. There is no minimum lease payment since all lease payments are contingent on actual volume of electricity produced.

Inventories

        Our inventories mainly comprise solar modules and solar parks under development or completed that are held for sale by us within a normal operating cycle.

        Inventories are stated at the lower of cost and net realizable value. Costs of solar modules are calculated using the weighted average method. Costs include expenditures capitalized during the course of obtaining permits required for solar parks (for example legal expenses, consultancy fees, staff costs and other costs), cost of land on which solar parks are developed or to be developed, and costs of construction, such as costs for procurement of solar module, invertors and other equipment, costs for designing, engineering and installation, and other direct costs capitalized in the course of construction.

        The proceeds from the sale of solar parks held for sale is recognized as revenue and the carrying amount of the solar parks is recognized as costs of sales.

        Net realizable value represents the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Provisions are made for inventory whose carrying value is in excess of net realizable value. Certain factors could impact the realizable value, so we

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continually evaluate the recoverability based on assumptions about market conditions. We regularly review the cost of inventory against its estimated net realizable value and record the lower of cost and net realizable value to cost of sales, if inventories have costs in excess of estimated net realizable values.

        We do not depreciate our inventories. If circumstances change, and we begin to operate our solar parks for the purpose of generating electricity income, we will reclassify those solar parks as IPP solar parks.

        During the year ended December 31, 2012, we changed intention with respect to three solar parks located in the Czech Republic with a total carrying value of US$23.4 million from holding them for sale to holding them as IPP assets, and reclassified these three solar parks from inventories to IPP solar parks. Of these three parks, we constructed one in 2010 without a binding purchase agreement, and acquired the other two in March 2011 for the purposes of resale. In October 2011, we identified a customer with whom we entered into a non-binding agreement for the purchase of the three solar parks. By the end of 2011, we were not able to reach a final agreement on payment terms with that customer. In January 2012, the market price of electricity in the Czech Republic began to stabilize which made re-financing the solar parks more feasible and, as a result, holding these assets as IPP solar parks became more attractive to us. Therefore, we decided not to sell the solar parks and instead to hold and operate them as IPP solar parks. Accordingly, we reclassified them as long-term assets. We also performed an impairment analysis at the time the solar parks were reclassified as IPP solar parks using the discounted cash flow method, and, based on that analysis, concluded that the solar parks were not impaired. In December 2012, we successfully refinanced approximately 70% of the total investment in our solar parks.

Impairment of tangible and intangible assets other than goodwill

        We review the carrying amounts of our tangible and intangible assets with finite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, we estimate the recoverable amount of the asset in order to determine the extent of the impairment loss (if any). When it is not possible for us to estimate the recoverable amount of an individual asset, we estimate the recoverable amount of the cash-generating unit to which the asset relates. When we can identify a reasonable and consistent basis of allocation, we allocate corporate assets to individual cash-generating units, or otherwise to the smallest group of cash-generating units for which we can identify a reasonable and consistent allocation basis.

        Recoverable amount is the higher of fair value less costs of disposal and value in use.

        In assessing value in use, we discount the estimated future cash flows to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If we estimate the recoverable amount of an asset (or a cash-generating unit) to be less than its carrying amount, we reduce the carrying amount of the asset (or the cash-generating unit) to its recoverable amount. We recognize an impairment loss immediately in profit or loss.

        When we subsequently reverse an impairment loss, we increase the carrying amount of the asset (or cash-generating unit) to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had we not recognized an impairment loss for the asset (or cash-generating unit) in prior years. We recognize a reversal of an impairment loss immediately in profit or loss.

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Share-based payment arrangements

        For our shares granted by us or transferred by controlling shareholders in exchange for services we receive that are conditional within a vesting period, we determine the fair value of services received by reference to the fair values of relevant shares granted or transferred. We expense the fair value of shares granted or transferred at the date of grant or the date of transfer on a straight-line basis over the vesting period, with a corresponding increase in equity, recorded as share-based compensation reserve. The forfeitures will be estimated to adjust over the requisite service period to the extent that actual forfeitures differ, or are expected to differ, from such original estimates. We will recognize the changes in estimated forfeitures through a cumulative catch-up adjustment in the period of change.

        At the time when the shares granted are cancelled during the vesting period, we account for the cancellation as an acceleration of vesting, and recognizes immediately the amount that otherwise would have been recognized for services received over the remainder of the vesting period. The amount previously recognized in share-based compensation reserve will remain in the share-based compensation reserve.

        We estimate the fair value of the share options on the grant date of each issuance using the binomial model, which is an option pricing model. We estimate the expected term based on the option term related to the vesting schedule and the expected option expiration date. We develop the volatility rate estimation based on the volatility of comparable companies within the expected term commensurate with the expected time period, and modified to reflect how currently available information informs our reasonable expectations about the future of the company. We determine the risk-free interest rate based on the yield of the U.S. Treasury Bond, denominated in U.S. dollars, with duration closest to the expected term.

        As a private company, we determine the fair value of our ordinary shares as of the grant date of the share-based awards by making complex and highly subjective judgments and assumptions about our projected financial and operating results. We are also required to make other assumptions such as our weighted average cost of capital, general market and macroeconomic conditions, nature and prospects of the industry, nature and stage of development of our company, comparable companies, and our business risks. These assumptions are inherently uncertain. Changes in these assumptions could significantly affect the valuation results and the amount of share-based compensation expenses we recognize in our consolidated financial statements.

        Share options that we issue in exchange for services we receive are measured by reference to the fair value of the share options granted. We expence the fair value of services received on a straight-line basis over the vesting period with a corresponding increase in equity (share-based compensation reserve).

        At the end of each reporting period, we revise our estimates of the number of options that are expected to ultimately vest. We recognize impact of the revision of the original estimates during the vesting period, if any, in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to equity.

        When share options are exercised, the amount previously recognized in our share options reserve will be recognized in share capital and additional paid-in capital. When the share options are forfeited after the vesting date or are still not exercised at the expiry date, the amount previously recognized share options reserve will be transferred to our accumulated losses.

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        We measure shares issued in exchange of services at the fair values of the services received, unless that fair value cannot be reliably measured, in which case we measure the services received by reference to the fair value of the shares issued. We recognize the fair values of the services received as expenses, with a corresponding increase in equity, when the counterparties render services, unless the services qualify for recognition of assets.

Internal Control over Financial Reporting

        Prior to this offering, we have been a private company with limited accounting personnel and other resources to address our internal control over financial reporting. In connection with the preparation and external audit of our consolidated financial statements, we and our independent registered public accounting firm identified a material weakness and other control deficiencies, each as defined in AU325, in our internal control over financial reporting as of December 31, 2013. As defined in AU325, a "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company's annual or interim financial statements will not be prevented or detected on a timely basis.

        The material weakness identified related to our insufficient accounting resources and process and procedures necessary to comply with IFRS and the SEC reporting and compliance requirements. Neither we nor our independent registered public accounting firm undertook a comprehensive assessment of our internal control for purposes of identifying and reporting material weaknesses and other control deficiencies in our internal control over financial reporting as we and they will be required to do once we become a public company. In light of the material weakness and other control deficiencies including a significant deficiency that was identified as a result of the limited procedures performed, we believe it is possible that, had we performed a formal assessment of our internal control over financial reporting or had our independent registered public accounting firm performed an audit of our internal control over financial reporting, additional control deficiencies may have been identified.

        To address the material weakness and control deficiencies identified, including the significant deficiency, we have taken and are planning to take a number of measures, including (i) hiring additional accounting personnel with experience in IFRS and SEC reporting requirements, especially at the regional level; (ii) providing regular training on an ongoing basis to our accounting personnel that covers a broad range of accounting and financial reporting topics; (iii) developing and applying a comprehensive manual with detailed guidance on accounting policies and procedures as well as procedures for maintenance and retention of accounting and financial records, (iv) forming an internal audit department, which will directly report to the audit committee; and (v) forming an audit committee which consists of independent directors to oversee the operation of our finance department, and to approve all related party transactions and other significant transactions. However, the implementation of these measures may not fully address the material weakness and other control deficiencies in our internal control over financial reporting. We are not able to estimate with reasonable certainty the costs that we will need to incur to implement these and other measures designed to improve our internal control over financial reporting. See "Risk Factors—Risks Related to Our Business and Industry—In the course of preparing our consolidated financial statements, we have identified a material weakness and other control deficiencies in our internal control over financial reporting, which, as of the date of this prospectus, have not been remediated. If we fail to achieve an effective system of internal control over financial reporting, we may be unable to accurately report our financial results or prevent fraud and investor confidence in our company and the market price of the ADSs may be adversely affected."

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JOBS Act and Adoption of Accounting Standards

        Upon completion of this offering, we will become a public company and expect to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act of 2002, as well as rules subsequently implemented by the SEC, impose various requirements on the corporate governance practices of public companies. For as long as we remain an "emerging growth company" as defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies." Under the JOBS Act, "emerging growth companies" are not required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act for up to the end of the fifth full fiscal year following the date of their initial public offerings.

Results of Operations

        The following table sets forth our results of operations for the periods indicated, both in absolute amounts and as percentages of our total revenue for the respective periods. Our historical results presented below are not necessarily indicative of the results that may be expected for future periods.

 
  Year Ended December 31,   Six Months Ended June 30,  
 
  2011   2012   2013   2013   2014  
 
  (US$ in
thousands)
  (% of total
revenue)
  (US$ in
thousands)
  (% of total
revenue)
  (US$ in
thousands)
  (% of total
revenue)
  (US$ in
thousands)
  (% of total
revenue)
  (US$ in
thousands)
  (% of total
revenue)