Cleantech Solutions International Inc (NASDAQ: CLNT)’s clean technology puts it in a position to play a key role in the implementation of the Paris climate agreement. Over 170 nations recently signed the agreement that commits governments and private corporations to get more serious about containing adverse climate change. One of the sectors expected to witness significant transformation because of the Paris climate deal is the energy sector, where Cleantech is a player.
Among other things, Cleantech Solutions International Inc (NASDAQ: CLNT) designs, manufactures and commercializes components used in energy industry. Its energy-themed products are used in clean energy programs such as wind power harnessing.
As part of the efforts to reduce greenhouse gas emission, the Paris climate agreement calls for a reduction in the utilization of fossil fuels. In the same breath, the deal calls on nations to promote usage of renewable energy from sources such as solar and wind.
Because Cleantech Solutions International Inc (NASDAQ: CLNT) already supplies components for solar, wind and other clean energy programs, the company stands to benefit from increased demand for renewable energy. The Paris climate deal could also unlock fresh growth opportunities for Cleantech in other areas of environment conservation.
However, Cleantech Solutions International Inc (NASDAQ: CLNT) reported a disappointing 4Q2015, which the company blamed on a problem with one of its China accounts. A large-contract Chinese customer raised issues that saw Cleantech book a massive impairment in 4Q2015. Among other things, the unnamed Chinese customer claimed that Cleantech didn’t supply the right product quality that it wanted.
The customer accounted for 13% of Cleantech’s total revenue in 2015. The management is in talks with the company but cannot guarantee that there will be a favorable outcome.
Because of the disruptions caused by the customer and other economic pressures, Cleantech Solutions International Inc (NASDAQ: CLNT) logged a gross loss amounting to $400,000. That compared with a gross profit of $4.7 million the company posted in the corresponding quarter a year ago.
The dispute with the Chinese customer saw Cleantech book $10.3 million non-cash expenses.