There’s a flurry of news coming from the embattled solar sector, led by a sharp cutback by Suntech (NYSE: STP) at its main US plant that looks suspiciously like it is being ordered by Beijing part of a government rescue plan for the struggling company. Meantime, JA Solar (Nasdaq: JASO) and LDK (NYSE: LDK) are struggling just to stay listed as their market values quickly evaporate. And in a rare but fleeting piece of good news, Yingli (NYSE: YGE), Trina (NYSE: TSL) and others are getting a temporary boost as they reclaim money they previously set aside but will no longer need to use as provisions in the US anti-dumping investigation against them.
Tag Archives: JA Solar
China’s Speeds Up Solar Lifeline 中国加大力度扶持光伏行业
A new Chinese media report shows that after more than a year of talk, Beijing is finally turning its aggressive talk on solar energy into action by more than doubling its approval of new solar power plants this year. The main question now is: Will any of its struggling solar panel makers survive long enough to enjoy the expected boom in business when some of these new plants start to get built. Of course industry watchers will know the answer is probably “yes”, as Beijing and local governments get set to hand out generous rescue packages to support these companies through a massive supply glut that has sent prices plunging and left everyone reporting big losses. (previous post)
News Digest: October 17 报摘： 2012年10月17日
The following press releases and media reports about Chinese companies were carried on October 17. To view a full article or story, click on the link next to the headline.
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- Baidu (Nasdaq: BIDU) Integrates MP3 Search with Baidu Music (English article)
- JA Solar (Nasdaq: JASO) Receives Nasdaq De-Listing Notice (Globe Newswire)
- Courier Shentong Refuses Some Deliveries From Jingdong Mall (Chinese article)
- Under-Fire ZTE (HKEx: 763) Sells Surveillance Systems Subsidiary (English article)
- China Mobile (HKEx: 941) Says 9 Vendors Win Contracts in TD-LTE Tender (Chinese article)
- Latest calendar for Q3 earnings reports (Earnings calendar)
China Gets Serious on Solar Energy 中国政府开始拯救光伏行业
After talking for much of the past year about plans to develop its solar power industry, Beijing may finally be starting to transform its words into action based on the latest signals coming from mid-sized panel maker JA Solar (Nasdaq: JASO) and an unusual move by leading US manufacturer First Solar (Nasdaq: FSLR). These 2 developments are interesting from a number of angles, as they could provide a welcome lifeline to the struggling global solar panel sector and also help to diffuse trade tensions with the west, which accuses China of unfairly subsidizing its industry. But before those tensions can really ease, Beijing will have to show it won’t favor its own solar panel makers in bidding for new China-based projects at the expense of western rivals. It will also have to take more concrete steps to wean its sector from the kinds of unfair subsidies behind the western complaints, including policies like low interest loans and export rebates.
More Solar Outrage Over EU Probe 欧盟光伏倾销调查触发众怒
The headlines are filled this morning with chatter on the latest news that the European Union is launching an anti-dumping probe into Chinese solar panel makers, following a similar investigation by the US that is likely to result in punitive tariffs by the end of this year. In addition to news of the probe itself, most of the major Chinese panel makers have issued their own statements protesting the move, and Beijing has also expressed regret over the decision. Rather than always turning to these predictable displays of outrage and disappointment each time they receive a setback in this year-long dispute, the Chinese players might consider trying a more conciliatory approach if they really want to avoid a trade war over an industry that everyone agrees will be critical to the development of long-term sustainable energy sources.
More Solar Winds: New Dawn Coming? 看好光伏产业东西合璧
Instead of lamenting the latest blow to the embattled solar sector that this time is coming from Europe, I’m going to take a different approach today and say that perhaps the ongoing flood of resistance from the west towards Chinese solar subsidies could actually have some positive long-term effects. The reason is this: Beijing, for all its good intentions, has shown it can throw money at developing industries to quickly establish big new manufacturers with major production capabilities. But those fast-rising powerhouses tend to be relatively bad at innovation, with many of the major new advances in the solar sector still coming from the west even as a growing number of players in the US and Europe go bankrupt.
Solar Shares: De-listings Ahead? 太阳能股票：未来会退市？
Bottom line: Several of China’s struggling solar shares are in danger de-listing, which could finally push some to consider mergers with rivals to save themselves.
Related postings 相关文章:
◙ Solar Storm Heats Up in US, China 中美太阳能产品征税之争升温
◙ Solar Comments: Consolidation Chinese Style? 太阳能行业：中国式整合
◙ Passive Beijing Blasts New US Solar Tariffs 中国炮轰美高关税不实用 解决太阳能产品纷争需更主动
Suntech Cleans House As Rebound Nears 光伏行业或年中回
Leading solar panel maker Suntech (NYSE: STP) has put out a broadly positive pre-earnings announcement, showing the struggling market may be nearing bottom in its current downcycle as the company also took major moves to control costs. Investors seemed to like what they saw, bidding up Suntech shares more than 8 percent in Friday trading after the news came out, even though shares are still at about a quarter of their levels from 2 years ago. In its earnings pre-announcement, Suntech said its shipments declined 10 percent in the fourth quarter from the third, a bit better than the 20 percent decline it originally expected. (company announcement) At the same time, its shipments for all of 2011 came in at 2.09 gigawatts, also a bit better than its previous forecast for 2 gigawatts. On the cost side, the company said it made major progress in reducing its debt and accounts receivable in the fourth quarter, both of which should help strengthen its balance sheet and make it more efficient. Investors seem to have focused on the better-than-expected revenue numbers that may reflect a broader industry rebound, with solar shares all logging sharp gains on Friday. Leading the pack was Canadian Solar (Nasdaq: CSIQ), which jumped 17 percent, while JA Solar (Nasdaq: JASO) was up 9 percent. Trina (NYSE: TSL) and Yingli (NYSE: YGE) also both logged nice gains of more than 5 percent. Of course, all of these stocks are still at a fraction of their level from 2 years ago, as the industry struggles with a big supply glut resulting from its rapid expansion over the last few years. In another positive sign for the industry, Trina has announced a new $100 million loan facility from Britain’s Standard Chartered (London: STAN) in what looks like a clear signal to the markets that private commercial banks are still confident enough to lend to these stronger solar companies even though most are now currently losing money. (previous post) By comparison, some of the weaker players like LDK Solar (NYSE: LDK) have had to resort to funding from Chinese banks and other local investors, which often provide funds for reasons that more political than commercial. Recent media reports indicate the sector is cautiously optimistic that demand will pick up later this year, with many companies hoping to restart idle capacity if prices rise above a certain level. Despite the upbeat signs, one of the big question marks in all this the current US anti-dumping investigation into Chinese solar panels, which could result in punitive tariffs in the near future. (previous post) But China has made recent signs that it is willing to discuss the issue and its broader subsidies for exporters in general, meaning the trade war might be short lived, perhaps being resolved after upcoming US presidential elections in November. If that happens and signs of stabilization continue, look for a rebound in both the sector and company share prices starting around the middle of the year.
Bottom line: The latest results from Suntech and broader industry comments point to a fledgling rebound for the solar battered sector starting around the middle of the year.
Related postings 相关文章:
◙ Solar: New Tie-Ups as US Ruling Looms 光伏产品倾销裁决临近 中国企业忙于外联公关
◙ Sany and Yingli Take Different German Tacks 三一重工和英利的德国交易或前景迥异
◙ LDK’s German Buy: Two Losers Combine 赛维LDK收购Sunways将使前者境况雪上加霜
Solar Matures With Foxconn Entry
You know your industry is starting to mature when a big player like Hon Hai (Taipei: 2317), the massive Taiwanese electronics maker of everything from PCs to iPhones, steps in to the picture, a move that should come as both a relief but also a worrisome development for the troubled solar cell sector. Foreign media are reporting that Hon Hai unit Foxconn Technology (Taipei: 2354) is building a massive new solar cell plant in China’s Jiangsu province, adding a major player to a sector already struggling with large overcapacity that has caused prices to tumble by more than 60 percent this year alone and driven nearly every company into the red as their stocks hover near all-time lows. (English article) This development is significant for 2 reasons, both of which should ultimately benefit the sector but will also cause some short term pain in the form of sorely needed consolidation. From a technological point of view, Hon Hai’s entry into the picture shows this sector has long term potential, as major companies like Hon Hai rarely make such investments without careful consideration of their profitability. But big players like Hon Hai are also famous for entering mature industries where margins are traditionally quite low and huge volume is necessary to make big profits, meaning the company believes that solar technology is starting to mature and profit margins will stabilize at low levels. This second factor is key, as it means that only companies with massive scale will be able to survive in the future, and that mid-sized and smaller players will either have to merge or risk going out of business in this bold new solar world. Companies that now have the scale to drive this much needed consolidation include industry leaders like Suntech (NYSE: STP), Yingli (NYSE: YGE) and Trina (NYSE: TSL), while companies that would be well advised to start looking for partners include names like JA Solar (Nasdaq: JASO) and Renesola (NYSE: SOL). No matter how you look at it, this move by Hon Hai looks like a positive development, providing not only a vote of confidence in the struggling sector, but also sending an important message that anyone who wants to play at this game in the future will need massive scale to do so.
Bottom line: Hon Hai’s entry into solar module making shows the industry has long term potential at low profit margins, and should help to drive much-needed consolidation.
Related postings 相关文章:
◙ Beijing Boosts Solar In Latest Mixed Signal 中国扩张太阳能行业发展 解决与美争端立场混乱
◙ China Rescues LDK With New Financing 中国拯救赛维LDK举动与未提供不公补贴说法相左
News Digest: December 3-5, 2011
The following press releases and media reports about Chinese companies were carried on December 3-5. To view a full article or story, click on the link next to the headline.
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◙ US Solar Firms Hurt by Chinese Imports, Trade Panel Says (English article)
◙ China Telecom (HKEx: 728), Unicom (HKEx: 762) Say To Mend Ways After Broadband Probe (English article)
◙ 64 Overseas-Listed China Firms Launch $300 Mln in Share Buybacks – Report (Chinese article)
◙ Shanda Interactive (Nasdaq: SNDA) Reports Q3 Unaudited Results (PRNewswire)
◙ JA Solar (Nasdaq: JASO) Completes Acquisition of Solar Silicon Valley (Globe Newswire)
Solar Buzz at German Show on New Tech, M&A
My headline for this item may be a little misleading, as I’m sitting here having my morning coffee in Shanghai writing it while speculating on what will happen at one of the world’s top solar energy shows that kicks off today in Germany. All the big Chinese names, including Suntech (NYSE: STP), Trina (NYSE: TSL), Yingli (NYSE: YGE) and many others, are attending the show this week in Hamburg, in a rare event that will bring together many of the sector’s top executives in a single place at a single time. (event homepage) Event materials and the flood of company press releases coming out this week are filled with upbeat talk of improving technology, which is helping the sector gain momentum, especially in markets with strong government incentives. What’s receiving little or no mention, however, is the industry’s current state of malaise, as it suffers through its worst-ever downturn amid slumping demand and overcapacity that has seen many weaker industry players, such as LDK (NYSE: LDK), sink into the red. While technology is indeed improving and will be widely discussed in public forums at the Hamburg event, I have no doubt that M&A will also be a regular topic of discussion between top company executives in more private venues and over drinks and other meetings out of public view. Renesola (NYSE: SOL), a mid-sized player in reasonably good health, already alerted the markets that it’s open to being acquired when it adopted a so-called “poison pill” plan last month to prevent a hostile takeover. (previous post) Other mid-sized players, such as JA Solar (Nasdaq: JASO), could also look like good acquisition targets, as the entire sector suffers from a stock market sell-off that has pushed share prices to very attractive levels. With so many executives in one place at one time, this event is the perfect starting place for talks on much-needed consolidation, and I wouldn’t be surprised to see announcements of the first round of M&A coming by the end of this year.
Bottom line: M&A is likely to be a common theme at a major solar event this week in Germany, with the first round of resulting deals likely to be announced by year-end.
Related postings 相关文章:
◙ Suntech: Separating Good Solar from Bad
◙ LDK: An Exploding Star for a Sector in Turmoil
◙ Renesola Rights Plan: Consolidation Coming
