Tag Archives: Renesola

News Digest: November 24, 2011

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The following press releases and media reports about Chinese companies were carried on November 24. To view a full article or story, click on the link next to the headline.

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◙ Yum Brands (NYSE: YUM) Signs Deal With Sinopec (HKEx: 386) (English article)

◙ CNOOC (HKEx: 883) Appoints Executive Director Li as Chief Executive as Growth Slows (English article)

◙ Fosun Buys $10.35 Mln Worth of Focus Media (Nasdaq: FMCN) Shares in Open Market (Chinese article)

◙ Yingli Green Energy (NYSE: YGE) Reports Q3 Results (PRNewswire)

◙ ReneSola (NYSE: SOL) Announces Q3 Results (PRNewswire)

New Solar Signals: Slowdown Easing Amid Writedowns 太阳能企业减计库存 行业或将开始摆脱危机

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The latest signals from embattled solar panel makers indicate the sector’s worst-ever downturn could be starting to ease, even as China turns up the rhetoric in a growing war of words over dumping accusations by Western manufacturers. Both Canadian Solar (Nasdaq: CSIQ) and Renesola (NYSE: SOL) have released updated guidance ahead of their official third-quarter announcements and the word, while downbeat, appears to show some signs that the crisis has bottomed out. Both firms lowered their margin outlook by moderate amounts, and both also lowered their third-quarter shipment targets, but again only by small to moderate amounts. (Canadian Solar announcement; Renesola announcement) But perhaps more significantly, both firms took big write-downs for unsold inventory, with Renesola writing down $20 million and Canadian Solar writing off about twice that amount. As a result, Renesola said it will post a $8 million loss for the third quarter.  These write-downs follow a similar write-down announced last week by Trina Solar (NYSE: TSL) (previous post), which gave similar lowered guidance as well. (previous post) In my view these write-downs look relatively significant, as one wouldn’t expect to see companies take such write-downs unless they were fairly confident the worst of the downturn was over, as most prefer to take this kind of charge all at once rather than repeatedly in smaller amounts over a longer period. Renesola itself sounded a slightly upbeat note, saying it expected more gloom in the fourth quarter and first quarter of 2012, but that things could improve after that. Meantime, China made a significant gesture in response to allegations that it unfairly subsidies its solar panel makers, with a major state-run firm announcing it was suspending plans to build $500 million worth of solar energy plants in the US due to uncertainty about potential new punitive tariffs against China solar panel makers. (English article) Indeed, such a plan would become uneconomical if the US imposes punitive tariffs, as the Chinese builder was planning to use Chinese-built solar cells for this series of plants which would suddenly become much more expensive under new tariffs. I still think the US is likely to levy these tariffs due to election-year politics, but clearly this kind of tactic by the Chinese may make some US policymakers think twice about such actions.

Bottom line: New guidance from 2 major solar players appear to show an easing of the industry’s crisis, as the war of words heats up in the US-China solar trade dispute.

Related postings 相关文章:

◙ More Solar Gloom From Trina

◙ Solar Fight Sees Accusations Flying 中美太阳能纠纷引发口水大战

◙ China Solars Brace for Icy 2012 With US Trade Complaint 中国太阳能产业需直面美欧关税壁垒

Solar Buzz at German Show on New Tech, M&A

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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

 

LDK: An Exploding Star for a Sector in Turmoil

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The bloodbath also known as China’s alternate energy sector is nearing the end of its worst reporting season on record, and newly updated guidance from problem-plagued LDK Solar (NYSE: LDK) should provide a spectacular finale to the show. (company announcement) The company won’t release final figures until the end of this month, but it has revised down all of its previous forecasts for the second quarter by 20 percent or more, including a staggering 63 percent downward revision in shipments of modules, the final product in the solar energy production chain. At the same time, its gross margins tumbled to about 2 percent from a previous forecast of about 24 percent, and it wrote off $60 million in inventory, which is the company’s way of preparing the market for a massive net loss when it releases its actual results. The company made its announcement after New York markets closed on Thursday, and not surprisingly its shares were down 21 percent in after hours trading. LDK’s dismal report follows downbeat results from nearly everyone, including the most recent forecast-missing figures from Canadian Solar (Nasdaq: CSIQ) (company announcement). Despite signs that the downturn has bottomed, severely depressed valuations this week prompted mid-sized player Renesola (NYSE: SOL) to approve a shareholder rights plan, often called a poison pill designed to prevent hostile takeovers, in a sign that we’re likely to see some consolidation in the months ahead for this bloated sector. Such consolidation would mean smaller companies like Renesola could become acquisition targets. But major money losers like LDK are likely to find little interest from potential buyers, forcing them to sell off assets or even to file for bankruptcy if they run out of funds.

Bottom line: LDK Solar’s sharply lowered Q2 guidance reveals a company on the brink of crisis, boding poorly for its future as the broader solar sector struggles to emerge from its current downturn.

Related postings 相关文章:

◙ Renesola Rights Plan: Consolidation Coming

◙ LDK: Cash Crunch Looming? 赛维LDK即将囊中羞涩？

◙ Trina, Ming Yang Kick Off New Wave of Energy Deals 天合光能、明阳风电掀起新一轮能源“订单潮

Renesola Rights Plan: Consolidation Coming

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The alternate energy sector’s current downturn may have bottomed, but signs of pain still linger, as reflected by the latest announcements from Renesola (NYSE: SOL), which may be bracing for hostile takeover attempts, and Yang Ming Wind Power (NYSE: MY), which reported anemic results and sharply reduced its full year outlook. In what looks like a first for the industry, Renesola has announced it will implement a shareholder rights issue plan, something companies do when they believe they could face a hostile takeover bid. (company announcement) Renesola added it knows of no imminent hostile takeover bids, but is rather seeking to protect its shareholders in case such a bid occurs. With a share price that has tumbled by more than two-thirds since March and a rock-bottom price-to-earnings ratio of 1.7, Renesola could indeed look like an attractive takeover target in an industry that is sorely in need of consolidation. Investors also seem to believe something may be in the works, with Renesola’s battered shares jumping more than 7 percent in Monday trade on Wall Street. Given such low valuations, I wouldn’t be surprised to see a buyout or two announced for Renesola or one of its other battered mid-sized competitors in the next few months. Meantime, Ming Yang has come out with its own weak results, and reduced its full year sales outlook by a hefty 20 percent. (company announcement) Even the lower full-year target looks difficult, with the company saying it hopes to sell 1.8 to 2 gigawatts worth of wind turbines in 2011, after selling only 0.7 gigawatts worth in the first half of the year. Its recent tie-up in China with the developer of the Three Gorges Dam project could put some wind back in its sails (previous post) in the second half of the year, but I wouldn’t be surprised to see more downward revisions before the year is finished.

Bottom line: Renesola’s shareholder rights plan could signal a coming wave of consolidation in the solar sector, with mid-sized companies like Renesola as attractive buy-out targets.

Related postings 相关文章:

◙ Solar Comeback Rising, Clouds Still Shadow Trina 光伏产业复苏中 天合光能仍疑云密布

◙ China Tie-Up Pushes Wind Power in US 国电和富国银行的合作推动美国风电的发展

◙ Trina, Ming Yang Kick Off New Wave of Energy Deals 天合光能、明阳风电掀起新一轮能源“订单潮