Cowen’s Stone Maintains Outperform Rating on Suntech (NYSE:STP)
Source: http://feedproxy.google.com/~r/smallcappulse/feed/~3/CYJIdzJX7YE/Posted on Thursday, June 11th, 2009 | In Market Commentary, Small & Micro Cap
June 10, 2009 ndash; Analyst Comments ndash; Cowenrsquo;s Rob Stone weighed in on Suntech (NYSE:STP) this morning, stating that the company is benefitting from the emerging utility scale market in China. The company signed an MOU for a 500MW, feed-in-tariff funded system in the Qinghai province, with construction scheduled to start construction in late 2009. He maintained an OUTPERFORM rating on the stock and sees 50% upside in the stock vs. the market in 12 months.
Key Takeaways
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Expects additional news about China projects and policy to provide triggers in the second half
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Suntechrsquo;s local partner, Asia Silicon, has enabled it to develop a stronger relationship with the Qinghai provincial government and will also enable it to retain a piece of ownership in the project
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Projecting $1.6 to $1.7 billion in revenue this year, projecting 2010/11 total production of 2,360MW (of which the Qinghai province will represent about 21%).
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Estimating system integration will increase 2010/11 EPS by 15-18%
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Revised model to account for the over allotment of recent offering, trimming 2010/12E EPS to $0.65, $1.30 and $1.87 respectively
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Expect Suntech to continue to leverage its channels and scale with outside partners (e.g., National Semiconductor and Petra Solar)
middot;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp;nbsp; Maintains OUTPEFORM rating and sees 50% upside in stock vs. market in 12 months
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