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China Yingli latest Business & Financial news from Doug Young, the Expert on Chinese High Tech Market

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

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After a month of tough-talk on Capitol Hill blasting China’s generous subsidies for its solar sector, the inevitable has happened and a group of leading US solar panel makers has filed to have punitive tariffs leveled against their Chinese rivals. The group, led by the US arm of Germany’s SolarWorld (Frankfurt: SWV) has officially petitioned the US International Trade Commission (ITC) to level the punitive tariffs after Chinese solar makers have prospered under years of support from Beijing, which has provided a wide range of incentives like cheap costs for land and low interest loans, to create an industry that now controls more than half the global market. (complaint announcement) Chinese solar firms, already suffering in the global sector’s worst-ever downturn due to overcapacity and weak demand, saw their shares plunge to near new all-time lows on the news, with Suntech (NYSE: STP), Trina Solar (NYSE: TSL) and Yingli Green Energy (NYSE: YGE) all down 6-9 percent in New York trading on Wednesday. I have to admit that the rapid speed of this latest development has surprised even me. It was only a month ago that the US House of Representatives launched hearings into this matter (previous post), after a major firm, Solyndra, became the latest US victim to declare bankruptcy, in part due to stiff competition from China. Since then, governments in both the US and Western Europe, the world’s two largest markets for solar panels, have shown strong support for punitive tariffs, which, in the case of the US, is motivated partly by politicians’ desire to look tough on China in the year before presidential elections in 2012. With such strong Congressional backing, the filing of a complaint by US solar firms to the ITC is likely to get a quick hearing and could result in punitive tariffs being levied as soon as the end of the year, in my view. Punitive tariffs in Western Europe could follow a short time later, casting a huge chill over the Chinese sector until Beijing makes some very open moves to show it is cutting back on its generous subsidies. Either way, Chinese solar firms and their stocks are looking at a chilly climate in 2012, with no relief in sight until the second half of the year at earliest depending on how Beijing reacts.

Bottom line: China’s solar panel makers will face a chilly 2012 following the filing of an unfair trade complaint against them in the US and the likelihood of similar action in Europe.

Related postings 相关文章:

◙ US Solar Probe: Get Ready for China Bashing 美国太阳能调查：炮轰中国大潮的前奏

◙ China Brushes Off Western Protest With New Ming Yang Support 明阳获巨额融资 表明中国不理会西方反对

◙ More Solar Woes With Plunging Prices

 

News Digest: October 20, 2011

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The following press releases and media reports about Chinese companies were carried on October 20. To view a full article or story, click on the link next to the headline.

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◙ SolarWorld, US Solar Manufacturers Petition to Stop Unfair Trade by China’s Industry (Businesswire)

◙ China 3G Users Cross 100 Million Mark, Account For 60 Pct of New Users in Jan-Sept (Chinese article)

◙ China to Draft New Regulations For E-commerce – Xinhua (English article)

◙ Chinese Authorities to Release Group Buy Regulations (English article)

◙ Yingli Green Energy (NYSE: YGE) Gives Key Highlights from Its Global Investor Day (PRNewswire)

More Solar Woes With Plunging Prices

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After staging a brief rally this week, solar module makers are returning to the defensive posture they have held for most of this year amid new reports that the slump in demand that has led to their worst-ever crisis seems to be accelerating rather than easing. Media are reporting the price of silicon, the main ingredient used to make solar cells, dropped a hefty 5.8 percent on October 10 from just a week earlier, in the latest indication that demand remains weak from an industry that built up massive new capacity during a brief boom under incentives rolled out by Western governments in 2009 during the global financial crisis. (English article) Demand for new solar power was already falling as the global crisis eased, and now it appears the problem is only getting worse as the US considers an anti-dumping complaint against Chinese manufacturers that produce over half the world’s solar panels (previous post), and as demand tumbles in Europe amid the unfolding Eurozone debt crisis. Shares in big names like Suntech (NYSE: STP), Trina Solar (NYSE: TSL) and Yingli Green Energy (NYSE: YGE) all plunged to near 52-week lows last week, but have staged a brief rally in the first 3 days of this week, possibly as bargain hunters swooped in to buy shares of companies whose forward price-to-earnings ratios are now in the super-low range of 4 to 5 times. The only problem is, most of those PE ratios are likely to soon become negative as analysts revise their estimates when companies start reporting losses as they sell their panels at below costs. While most Western producers have reported net losses in recent quarters, including a number that have gone bankrupt, only a handful of Chinese players have reported losses so far. But look for that too change if the current trends to continue, which looks likely, which will push solar cell makers’ stocks to new lows in the weeks and months ahead.

Bottom line: Tumbling material prices show that weakness in the solar cell market is accelerating rather than easing, which will push panel maker share prices to new lows in the weeks ahead.

Related postings 相关文章:

◙ US Congress Turns Up Heat in China Solar Debate

◙ Tech, Environmental Issues Cast New Clouds Over Solar Firms

◙ US Solar Probe: Get Ready for China Bashing 美国太阳能调查：炮轰中国大潮的前奏

News Digest: October 11, 2011

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The following press releases and media reports about Chinese companies were carried on October 11. To view a full article or story, click on the link next to the headline.

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◙ China State Investor Buys Shares in Four Biggest Banks as Valuations Slump (English article)

◙ Alibaba Said to Seek Temasek Financing to Buy Yahoo’s 40% Stake in Itself (English article)

◙ Rumor: TD-LTE Trials Stalled in Two Cities (English article; Chinese article)

◙ Lenovo (HKEx: 992) Delays Internet TVs Due to Regulatory Difficulties (English article)

◙ Yingli Green Energy (NYSE: YGE) Announces New and Improved Warranty Terms (PRNewswire)

Tech, Environmental Issues Cast New Clouds Over Solar Firms

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As if things weren’t bad enough for Chinese solar firms, two new developments  are casting clouds over this already struggling sector, one overseas and one at home. Overseas, foreign media are reporting that new solar cells with record efficiency developed by First Solar (Nasdaq: FSLR), one of the last US players still in business following a recent round of bankruptcies, could significantly undermine Chinese rivals. (English article) The second development has seen a smaller US-listed Chinese firm, JinkoSolar (NYSE: JKS) apologize for leaking toxic waste into the environment at its China plant, and promise to clean up the mess. (English article) Let’s look at the First Solar development first, as it probably has the biggest implications. First Solar has showcased a new technology that can turn more than 15 percent of the sunlight it captures into electricity, a huge increase over current top rates that now stand at around 11 percent. Presuming it can commercialize the technology quickly, this kind of efficiency should give the company a huge edge over its Chinese rivals like Suntech (NYSE: STP), Trina (NYSE: TSL) and Yingli (NYSE: YGE), which may have to further lower their already anemic prices to attract customers with their less efficient products. Of course the Chinese companies are also working hard to develop their own higher efficiency products, but unless they can bring some to market soon we might even see First Solar tie up with one or two Chinese producers if demand for the new high-efficiency cells is strong enough. As to JinkoSolar, this story highlights China’s growing concerns about its environment and crackdowns on companies that carelessly dispose of their wastes. I suspect that the larger solar makers are more responsible in their waste disposal, but wouldn’t be surprised to see unexplained rising costs on some of their balance sheets in the next year or two as they install more equipment to dispose of their toxic wastes in more environmentally friendly ways.

Bottom line: New high efficiency solar cells from a US firm will further pressure already weak prices at Chinese players, whose costs for treating their toxic wastes are also likely to rise.

Related postings 相关文章:

◙ US Solar Probe: Get Ready for China Bashing 美国太阳能调查：炮轰中国大潮的前奏

◙ US Solar Maker Fights Back With Govt Loan

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

Tidbits: Sany Heavy, Yingli, WineNice

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There are quite a few too good stories out there today, so here are some quick takes on a few that didn’t make the headlines but look interesting nonetheless.

— Sany Heavy Industries (Shanghai: 600031): China’s largest maker of construction machinery is moving ahead with a Hong Kong IPO to raise up to $3.3 billion despite a frosty market. This one looks interesting, coming just days after leading brokerage CITIC Securities, another attractive blue-chip, announced a similar plan. These two deals coming so close together look like Beijing may be at work behind the scenes to try to revive China’s struggling stock markets. (English article)

— Yingli Green Energy (NYSE: YGE): The company announced the resignation of one of its independent directors, who also happens to be a member of its audit committee and the CEO of China’s biggest Internet company Tencent (HKEx: 700). This announcement looks strikingly similar to ones in July from Trina (NYSE: TSL) and LDK (NYSE: LDK), and indicates these companies may be getting a tad too creative with their accounting. (company announcement)

— WineNice: Chinese media are reporting this online wine seller has raised a sweet $80 million in first round venture capital funding. This deal shows that major new investment is still flowing into Chinese Internet firms, although at a slower speed than earlier this year. This wine seller looks like an interesting niche player that could potentially survive the looming Chinese Internet bubble, drawing on appetite from a new generation of Chinese yuppies for wine. (Chinese article)

 

 

US Solar Probe: Get Ready for China Bashing 美国太阳能调查：炮轰中国大潮的前奏

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The Republican-controlled House of Representatives has seized on a scandal surrounding a bankrupt US solar panel maker for some new political theater, which means we can probably expect to see a new round of China bashing in the run-up to next year’s presidential election. So what’s happening here? According to media reports, US solar panel maker Solyndra could default on a $528 million loan guaranteed by the US government following its recent bankruptcy filing, forcing the government to repay the loan. (English article) While this appears to be a purely US matter, since both the company and loan are US-based, an investigation in the House of Representatives is likely to explore WHY the US firm went bankrupt as part of a Republican-led show designed to embarrass the Democrats. When that happens, executives from Solyndra and other struggling US solar panel makers, many of which have also gone bankrupt in recent months, will undoubtedly tell Congress about the unfair competition they face from big Chinese names like Suntech (NYSE: STP), Trina (NYSE: TSL) and Yingli (NYSE: YGE), which receive huge support from the Chinese government in the form of subsidies and preferential loans, in addition to their natural advantage of low labor costs. When that happens, look for House Republicans to take at least some symbolic action, such as proposing punitive tariffs for Chinese-made solar cells, to show they are being tough on China in the run-up to next year’s elections. Of course, none of their plans will ever succeed since the Democrats still control the Senate and the presidency. But that kind of reality hasn’t stopped the Republicans since they gained control of the House last year, and all the talk and negative publicity could cause an already battered field of US-listed Chinese solar firms to see their shares sink even lower.

Bottom line: Chinese solar panel makers are likely to become targets in an upcoming round of political theater in Washington, further pressuring their already-battered shares.

美国太阳能面板生产商Solyndra破产，众议院借题发挥，也就是说走向明年总统大选前，我们可能又要看到一轮炮轰中国的热潮。到底是什麽情况？据媒体报导，Solyndra近日申请破产後，公司的5.28亿美元政府担保贷款可能发生违约，迫使政府出面还款。虽然此事看似美国内务，因无论当事企业还是贷款都是发生在美国境内，但众议院调查可能会清查Solyndra为何破产。众议院由共和党控制，调查旨在让民主党难堪。一旦调查展开，Solindra与美国其他苦苦挣扎的太阳能企业必定向国会大倒苦水，抱怨面临尚德(STP.N)、天合光能(TSL.N)与英利(YGE.N)等中国太阳能大企如何进行不公平竞争。中国政府通过补贴与优惠贷款等形式向这些企业提供巨大支持，而且公司本身还有劳动力成本低的天然优势。如果出现这种情况，预计众议院内的共和党人至少会采取象征性行动，诸如提议对中国制造的太阳能电池板徵收惩罚性关税，以在大选日益临近之际彰显他们对中国的强硬态度。当然，他们的提案根本行不会获得通过，因为民主党仍控制参议院与白宫。但这并不妨碍共和党去采取行动力，一切的争论与负面宣传可能导致在美上市的中国太阳能题材股进一步下跌。

一句话：华盛顿新一轮政治博弈越来越近，中国太阳能面板制造商可能不幸沦为博弈目标，进一步压低相关企业的股价。

Related postings 相关文章:

◙ US Solar Maker Fights Back With Govt Loan

◙ Suntech: Separating Good Solar from Bad

◙ LDK: An Exploding Star for a Sector in Turmoil

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

 

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

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Trina Solar (NYSE: TSL) has just announced updated guidance for its second quarter that looks downright ugly, making its rosy outlook for the rest of the year even stranger, possibly signalling a bottom for the struggling solar sector in its worst-ever downturn. Just days before reporting its results, Trina has told the market it expects its unit sales to come in around 10 percent below its previous guidance, while margins will miss previous guidance by an even sharper 20 percent. (company announcement) But what’s decidedly odd here is that the company is sticking to its previous full-year guidance for 65-70 percent shipment growth on the back of a sharp turnaround in the second half of the year. The conflicting news initially spooked investors, who sold off Trina shares but then later started buy, causing the company’s stock to end down a modest 1.4 percent on Tuesday, well ahead of much bigger losses for the broader indexes. The unusual second-quarter guidance looks even stranger in light of much more positive second-quarter guidance given a day later by rival Yingli (NYSE: YGE), which said its results will come in at or higher than previous forecasts (company announcement). I’m going to be a bit cynical here and note that Trina was one of two companies whose audit committee chairmen suddenly resigned last month (previous post), which hinted at potential accounting issues within the firm. That said, Trina’s sudden sharp shortfall in quarterly results looks suspiciously like part of an effort to quietly cover up accounting issues that need to be “resolved”. If that’s the case, then the company should be commended on the one hand for resolving those issues, but also criticized for the way in which it did so. Regardless, investors are clearly focused on the future, which includes fresh incentives from Beijing for building new solar power plants (previous post) and a possible pick-up in demand from other global markets. Still, I would be wary of Trina’s stock for the short term, even as the broader solar sector appears on the cusp of a comeback.

Bottom line: The solar sector’s downturn may have bottomed out in the second quarter, but look for continued uncertainty around Trina following the resignation of its audit committee chairman.

天合光能(Trina Solar)(TSL.N)刚刚下调了第二季度光伏电池出货量和毛利率的预估，使其对今年馀下时间作出的靓丽前景描绘更显诡异，可能也为苦苦挣扎的光伏产业发出了一个陷入谷底的信号。天合光能在距离季度财报发布仅几天的时间下调预估，预计其光伏电池出货量比此前预估低10%，而毛利率相比此前预估则降幅更大，达到20%。但奇怪的是，天合光能依然坚持此前65%-70%的全年出货量增长预估，因公司预计今年下半年将有大转机。这种逻辑相悖的消息起初吓坏了投资者，他们先抛售天合光能的股票，随後又买进，造成该公司周二股价收低1.4%，但依然好于大盘表现。而其竞争对手英利绿色能源(YGE.N)一天后表示该公司业绩符合或高于其此前预估，英利第二季度更为正面的预估，使得天合光能异乎寻常的第二季度预估看起来更为奇怪。我在这里要做个小小地恶意揣测，并要指出天合光能的独立董事兼审计委员会主席上月突然离职，这暗示着公司内部可能潜存着审计问题。这就是说，天合光能大幅下调季度业绩，看起来似乎像在悄然掩盖“亟需解决的”审计问题。若果真如此，那麽我一方面既要称赞天合光能对这些问题的解决，又要批评其解决之道。无论如何，投资者明显着眼的是未来，包括中国对修建新的光伏发电的最新激励措施以及全球其他市场可能增加的光伏需求。但我短期内对天合光能的股价还是有所警惕，即便整个光伏产业似乎都在反弹回归中。

一句话：光伏产业的疲软可能在第二季度见底，但伴随着审计委员会主席的辞职，天合光能似乎还有不确定性。

Related postings 相关文章:

◙ China’s Solar Plan: Get Ready for Big New Spending

◙ Latest Solar Audit Resignation Hints at Major Issues Ahead 中国太阳能行业再现审计人员辞职：昭示问题还在前方

◙ More Solar Woes at Trina, Renesola 昱辉阳光、天合光能：旧伤未去，新伤又来

China’s Solar Plan: Get Ready for Big New Spending

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After months of talk, China has finally come out with some concrete details of how it plans to support its struggling solar panel makers, rolling out a new set of state-set electricity rates designed to make solar power generation economically attractive. Under the new rates announced earlier this week, solar power producers will be able to charge 1.15 yuan per kilowatt hour for their electricity, according to Chinese media reports. (Chinese article) Shares of major names like Trina Solar (NYSE: TSL), Suntech (NYSE: STP) and Yingli (NYSE: YGE) briefly surged on the news, but then gave back most of their gains after investors and industry watchers did some number crunching and realized the new rates were far from ground-breaking. One industry source told me that under the new rates, a relatively well-planned and managed power producer might expect to earn an annual return of 2-3 percent — not very exciting when other options are available at much lower risk levels. In order for this plan to work, local governments will have to step in and offer their own incentives for building new solar power plants — something that will probably happen on a much more piecemeal basis. Following the central government’s announcement, I would expect to see a string of announcements of new projects in the months ahead as local governments and big state-controlled power producers like Huaneng (HKEx: 902) fall into step with the central government’s policies. Industry leaders with strong government connections, such as Hong Kong-listed GCL Poly Energy (HKEx: 3800), could be some of the biggest beneficiaries of a new round of China construction that could see the nation install as much as 10 gigawatts of new capacity by 2015 and 50 gigawatts by 2020. (previous post) The new policy should also receive general public support because of its green nature, making it less prone to potential cuts under a likely new wave of cutbacks in major new government programs sparked by Beijing’s desire to cool the economy.

Bottom line: Beijing’s announcement of new tariffs for solar power projects presages a series of new solar power projects in the coming months to support the struggling solar panel sector.

Related postings 相关文章:

◙ More Solar Woes at Trina, Renesola 昱辉阳光、天合光能：旧伤未去，新伤又来

◙ Latest Solar Audit Resignation Hints at Major Issues Ahead 中国太阳能行业再现审计人员辞职：昭示问题还在前方

◙ China Backs Solar Firms With Europe Financing 中国继续支持国内太阳能企业