Bottom line: Diversification moves away from manufacturing by Canadian Solar and ReneSola could bring more stability to the companies, while panel makers are likely to take a big hit from new US anti-dumping measures.
ReneSola, Canadian Solar in new diversification moves
A trio of solar energy stories are in the headlines that underscore difficulties panel makers are facing due to a recent glut that looks quite typical in this highly cyclical sector. Two of the stories reflect a trend that has panel makers trying to diversify into the less cycle-prone business of solar plant building, with major new developments from Canadian Solar (Nasdaq: CSIQ) and ReneSola (NYSE: SOL). The third has a research house predicting demand for the panels, which are the main component of such plants, could dive by up to half in the US this year, following a major new anti-dumping ruling by Washington.
Again, all of this shows that the world is still swamped with too much solar panel-making capacity and is in sore need of a downsizing. The main obstacle to that is coming from China, where many companies have slipped into the loss column but refuse to slim down due to resistance from local interests intent on staying in the business come hell or high water. It’s a bit unclear who will blink first in this battle to stay in business, though in this kind of war the market usually determines who emerges as victor. Read Full Post…
Bottom line: India is unlikely to levy anti-dumping tariffs on Chinese solar panel makers, despite the likelihood that it will launch an investigation.
India set to launch anti-dumping probe on Chinese panels
The news just seems to be getting worse and worse for China’s embattled solar panel makers. First the group was hit a few years back by anti-dumping tariffs from the US and Europe, and more recently the highly cyclical industry has gone into a downturn that has pushed a growing number of players into the red. As if that wasn’t bad enough, media are reporting that India may be getting set to launch an anti-dumping investigation against the group.
The news has been spooking investors somewhat, but not as much as you might expect. In fact, most of the solar shares have been on a rally for the last month, and have pulled back a little in light of this news from India. Perhaps that’s because some are saying an anti-dumping probe will take at least a few months to complete, and also that it’s far from clear that India will actually rule against the Chinese companies. Read Full Post…
The following press releases and news reports about China companies were carried on May 24. To view a full article or story, click on the link next to the headline.
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SF Express Eyes Backdoor Listing Using Dingtai Rare Earth (Shenzhen: 002352) (Chinese article)
Tencent-Backed China Music Corp Launches Process for NY IPO (Chinese article)
Coolpad (HKEx: 2369) Denies Report of Plan to be Acquired by LeEco (Shenzhen: 300104) (Chinese article)
Wal-Mart (NYSE: WMT) China Sales Rise 5.1 Pct Y/Y in Q1 (English article)
The following press releases and news reports about China companies were carried on March 17. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Said to Appeal US Export Ban After Lobby Efforts Fail (English article)
Ctrip (Nasdaq: CTRP) Reports Q4 and Full Year Results (PRNewswire)
BAIC, BYD, Dongfeng Motor to Use LeEco (Shenzhen: 300104) Car Internet System (Chinese article)
Terra Firma Rejects HNA Bids for Jet Leasing Group AWAS – Sources (English article)
ReneSola (NYSE: SOL) Announces Convertible Note and Share Repurchases (PRNewswire)
The following press releases and news reports about Chinese companies were carried on March 9. To view a full article or story, click on the link next to the headline.
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ZTE (HKEx: 763) Urges Suppliers to Seek US Export Licensee: Source (English article)
Smartphone Maker Dakele Shuts Down as Backers Sever Ties (Chinese article)
ReneSola (NYSE: SOL) Announces Q4 and Full Year 2015 Results (PRNewswire)
Bottom line: The EU’s extension of punitive tariffs to China-made solar panels transshipped through shell factories in Malaysia and Taiwan could kill a recent wave of offshore factory construction by Chinese manufacturers.
EU freezes out Chinese solar panels in Taiwan, Malaysia
A recent offshore movement by Chinese solar panel makers seeking to avoid western anti-dumping tariffs could come to a sudden halt, with word the European Union (EU) is extending its previously announced punitive duties to Taiwan and Malaysia. The EU’s ruling means it believes that many of the offshore solar panel plants recently built by Chinese manufacturers are little more than shells designed to hide the true origin of their products.
This story dates back 3 years, and began when the EU levied anti-dumping tariffs on Chinese-made solar panels after determining manufacturers were receiving unfair government support via policies like cheap land, low-interest loans and export rebates. Chinese manufacturers quickly agreed to raise their prices to levels comparable to those of western rivals in a bid to avoid the tariffs. But then they almost immediately began to violate the spirit of that agreement by offering discounts to buyers in other ways. Read Full Post…
Bottom line: Yingli’s new bank loan will be followed by a major restructuring that will force big losses on bond and shareholders, while a new asset-backed bond program to help the broader panel sector raise money will meet with tepid reception.
Beijing throws new lifelines to Yingli, solar sector
China is throwing a couple of lifelines to its struggling solar panel sector, including a relatively large rescue package for Yingli (NYSE: YGE), the player in the most precarious position. That package will see a consortium of banks, led by the policy-driven China Development Bank, provide Yingli with 2 billion yuan ($300 million) in funds as the company tries to reorganize its financially strapped balance sheet.
Word of the rescue package comes as media are reporting separately that China is preparing a much bigger lifeline for the sector, by allowing solar panel makers to sell bonds backed by the growing number of solar farms they are self-developing. Such farms provide a steady source of income from the power they generate, and thus should theoretically be more attractive to investors than directly investing in the financially-challenged solar panel makers themselves. Read Full Post…
Bottom line: The large premium being offered in Trina Solar’s new buyout reflects a recent flood of private equity chasing privatization deals for US-listed Chinese firms, and could breathe new life into many previously announced bids that have become dormant.
Trina gets rich buyout offer
The homeward migration by US-listed Chinese firms has taken a turn into the new energy sector, with solar panel maker Trina (NYSE: TSL) becoming the first major player in the space to announce a management-led buyout offer. Throughout the current round of buyouts that has seen some 3 dozen US-listed Chinese companies announce privatization bids this year, few have come in the new energy sector that includes about a half dozen of China’s top solar panel makers listed in New York.
That’s not to say that New York has been a comfortable place for these companies. Most of the big names saw their shares soar in their first few years in New York, only to watch them tumble between 2011 and 2013 as panel prices plunged due to massive oversupply. That downturn saw the departure of 2 of the sector’s biggest names from Wall Street, though the exit of Suntech and LDK was prompted by bankruptcy rather than privatization. Read Full Post…
Bottom line: Weak share reactions to upbeat news from Trina, ReneSola and Ming Yang reflect investor skepticism towards new energy stocks, as they face lingering issues of overcapacity and phasing out of government subsidies.
Investors pour rain on upbeat new energy news
A flurry of upbeat news is in the headlines today from 3 of China’s largest new energy equipment makers, led by a return to the profit column for solar panel maker ReneSola (NYSE: SOL) after a year in the red. At the same time, wind power equipment maker Ming Yang (NYSE: MY) also announced its latest quarterly results that were quite upbeat, and solar panel maker Trina (NYSE: TSL) said it obtained a modest new financing from some major global lenders.
But contrary to expectation, investors greeted the string of upbeat news by dumping shares of all 3 companies, reflecting a high degree of skepticism in the market. Ming Yang led the downward migration, with its shares slipping 3.7 percent after it announced its latest quarterly results. Its shares now trade more than 17 percent below the price for a previously announced buyout bid to take the company private. Read Full Post…
The following press releases and media reports about Chinese companies were carried on November 18. To view a full article or story, click on the link next to the headline.
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Former Google (Nasdaq: GOOG) China Chief Plans to Take Startup Incubator Public (English article)
Fox International Inks Production Deal With China’s Huace (Shenzhen: 300133) (English article)
Movie Ticket Booking Platform Weiying Shidai Wins 1.5 Bln Yuan Series C Funding (English article)
Bottom line: Solar shares are likely to remain volatile over the next year, with current trends continuing that see Chinese companies open more offshore plants and stronger players steal share from weaker rivals.
Mixed signals from solar sector
After a brief rally to kick off the week on upbeat guidance from sector leader Canadian Solar (Nasdaq: CSIQ), Chinese solar stocks have quickly given back most of their gains on a more ominous signal from money-losing ReneSola (NYSE: SOL), which says its CFO has resigned after just over a year on the job.
Timing of the departure of Daniel Lee is somewhat coincidental, as it comes just a week after I met him and he detailed his strategy for keeping output stable and paying down debt. That strategy helped ReneSola to shrink its net loss to $2.3 million in the second quarter from a much larger $18 million in the first quarter. But that loss-cutting didn’t come without a price, as ReneSola’s solar module shipments also dropped by a third over that period. Read Full Post…
