Bad News for the Solar Sector & China Sunergy
Posted on Friday, August 24th, 2007 | In Foreign MarketsThere are some seriously poorly performing stocks in the solar sector, especially the smaller Chinese PV makers - and the way things are going some of these players won’t be around for the long haul.
Out today is news from China Sunergy (CSUN), an IPO from May of this year and the news is poor across the board.
1. Quarterly Loss
2. Pricing Pressures
3. Lower production target due to inability to secure polysilicon
4. Oh yeah, and save the best for last: CFO resignation (CEO resigned not too long back)
But other than that, everything seems fine…. (ouch)
As mentioned previously in blog entries, the tight supply of polysilicon continues to be a pressure point for companies across the sector, outside of those involved in thin film, i.e. First Solar (FSLR).
The type of results from China Sunergy is why when asked “Why are these Chinese PV solar makers so cheap based on 2008 earnings?”, the answer is - right now no one can believe those 2008 estimates because they are based on enough polysilicon being available and if available, available at price points that make the production profitable.
This is the first company I have seen that is severely curtailing 2007 production due to this issue: ” The company now sees total shipments in 2007 to be in the range of 78 megawatts to 83 megawatts. It had earlier forecast annual production to be between 95 and 110 megawatts.”
2008 expansion was also curtailed from 6 lines to 4 lines.
Other companies showing severe strain in recent quarterly reports are: Canadian Solar (CSIQ) and Solarfun Power (SOLF)
Last 5 posts by Trader Mark
- Bookkeeping: Closing Baidu.com (BIDU) - December 22nd, 2008
- Bookkeeping: Beginning to Rebuild A-Power Energy (APWR) - December 22nd, 2008
- Goldman Sachs Downgrades Monsanto (MON) and Potash (POT) - December 22nd, 2008
- Wall Street Journal: Property Developers Ask for Government Bailouts - December 22nd, 2008
- CBS News: Secret Santas - December 20th, 2008
 About Trader Mark (http://fundmyfund.blogspot.com)
Mark is a self taught private investor, fascinated by the market since an early age, discovering mutual funds as a teenager in the 80s, and then moving to equities by the mid 90s. His equity focus is identifying secular growth trends, and the companies most likely to benefit from these macro trends. Stocks are identified through fundamental analysis, although basic technical analysis is used in determining entry and exit points. With a degree in Economics from the University of Michigan, a broader understanding of the economy as a whole, along with interpreting investor psychology is also a major interest for Mark. His career background has focused on financial analysis in corporate America. |
No recommendations, either expressed or implied, are being made to buy, sell, hold or short any of the mentioned stocks. No legal, tax or accounting advice is expressed or implied. Always contact your attorney, CPA, or tax advisor before acting on any legal or tax issues. StraightStocks.com is not responsible for the content, products, or services of any of the advertisers on this site. StraightStocks.com receives compensation from advertisers on this blog. Services and products referred to herein are trademarks, registered trademarks, servicemarks, and/or registered servicemarks of their respective trademark or servicemark owners.