Renewable Energy Stock on Watch: JA Solar Holdings Co. Ltd. (JASO)
  • Stock Alert for JA Solar Holdings Co. Ltd. (JASO)
  • Stock Alert for JA Solar Holdings Co. Ltd. (JASO)
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    Stock Alert for Suntech Power Holdings Co. Ltd. (STP)

    Suntech Power Holdings Co. Ltd. (STP) is a producer industry-leading solar products for residential, commercial, industrial, and utility applications. With regional headquarters in China, Switzerland, and the United States, and gigawatt-scale manufacturing worldwide, STP has delivered more than 15 million photovoltaic panels to over a thousand customers in more than 80 countries. The Company’s pioneering R&D creates customer-centric innovations that are driving solar to grid parity against fossil fuels.

    Share Statistics (11-Jan-12)   FY

    2009

    FY

    2010

    %

    Chg

    Q3

    2010

    Q3

    2011

    %

    Chg

    Symbol STP Revenue, $Mn 1,693.30 2.901.90 71.4% 743.70 809.80 8.9%
    Current price $3.26 Gross marg. 19.6% 12.7% -35.2% 17.9% 13.3% -25.7%
    52wk Range: $1.70-$10.83 Oper. margin 6.8% -2.0%
    Avg Vol (3m): 3,240,500 Net margin 5.1% 8.2% 60.8% 4.5% -14.4% -420.0%
    Market Cap. 588.60M              
    Shares Outstanding 180.55M EPS, $ 0.50 1.50 200.0% 0.18 -0.64 -455.6%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of Chinese solar company Suntech Power Holdings rose as much as 29% Wednesday as news on German solar market and improving prices sparked a sector-wide rally.

    STP shares have gained 34.2% in the last five days and 19.9% in the last month.  Year-to-date, the stock is down 63.8%.

    As reported by Reuters, Germany, a significant sales market of several sector bellwethers, installed 7.5 GW of solar power in 2011.  That figure topped the prior year’s record of 7.4 GW. The country’s solar market remained stable in 2011 compared with the prior year, suggesting demand for modules remains high despite large cuts in support for the sector over the past two years, the report said.

    Investors also welcomed the news on stabilizing prices for polysilicon, the industry’s key raw material. Polysilicon was selling for about $30 a kilogram on the spot market after bottoming at around $24, said Avian Securities analyst Mark Bachman. However, he stated that solar cell and panel prices are still dropping and that more companies will need to go out of business this year to ease the industry’s massive oversupply.

    Shares of SMSI added $0.70, or 27.3%, to close Wednesday’s trade at $3.26.  Over the last 52 weeks, the stock has ranged from a low of $1.70 to a high of $10.83.  It is currently above  its 50-day moving average of $2.41 and below its 200-day moving average of $4.08.

    Source:

    http://www.reuters.com/article/2012/01/11/us-solar-shares-idUSTRE80A19920120111?feedType=RSS&feedName=globalMarketsNews&rpc=43

    Financial Summary

    STP reported total net revenues of $809.8 million in the third quarter of 2011, representing a sequential decrease of 2.5%, and an increase of 8.9% year-over-year.  Total PV shipments increased approximately 16% sequentially, and 36% year-over-year.

    For the latest reported quarter, the Company gross profit was $107.8 million and gross margin was 13.3 %, compared to $33.7 million and 4.1%, respectively, in the second quarter of 2011; and $133.1 million and 17.9%, respectively, in the third quarter of 2010.

    The gross profit in the second quarter of 2011 was impacted by a $91.9 million write-off of the unamortized cost of warrants previously issued to MEMC in conjunction with a supply agreement, which was terminated in the second quarter of 2011. Non-GAAP gross profit in the second quarter of 2011 was $125.6 million.

    Net loss attributable to holders of ordinary shares was $116.4 million, or $0.64 per diluted ADS, for the third quarter of 2011, compared to a net loss of $259.5 million, or $1.44 per diluted ADS, for the second quarter of 2011 and a net gain of $33.1 million, or $0.18 per diluted ADS, for the third quarter of 2010. Non-GAAP net loss attributable to holders of ordinary shares in the second quarter of 2011 was $33.8 million, or $0.19 per diluted ADS.

    STP’s cash and cash equivalents totaled $458.4 million as of September 30, 2011, compared with $648.2 million as of June 30, 2011. The primary uses of cash in the third quarter of 2011 were capital expenditures and the repayment of the current portion of a long-term loan.

    Source: http://ir.suntech-power.com/phoenix.zhtml?c=192654&p=irol-newsArticle&ID=1632766&highlight=

    Financial Strength (11-Jan-2012)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 0.63 1.19 0.86 0.76
    Current Ratio (MRQ) 0.88 1.70 1.13 1.12
    LT Debt to Equity (MRQ) 48.74 164.27 16.06 108.83
    Total Debt to Equity (MRQ) 147.40 173.80 20.86 147.61
    Interest Coverage (TTM) 1.87 4.56 26.39

    Source: Reuters.com, SEC Filings.

    Technical Analysis

    Source: http://stockcharts.com

    STP is above the upper Bollinger Band, implying that it is currently extended from its recent trend. Be aware, however, that a cross outside of the Bollinger Bands can sometimes be a signal of trend strength and not, necessarily, trend reversal.

    The MACD for STP currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jan11-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
    JA Solar Holdings Co. Ltd. JASO 1.44 319.43M n/a n/a 0.20 0.24
    SunPower Corp. SPWR 6.69 744.31M 95.57 19.68 0.31 0.27
    Sharp Corp. SHCAY 8.61 9.41B 33.12 n/a 0.26 0.27
    First Solar Inc. FSLR 38.77 3.61B 6.63 9.25 1.25 0.96
    Diversified Electronics Median       11.50 n/a 0.72 n/a
    Suntech Power Holdings Co. Ltd. STP 2.56 588.60M n/a n/a 0.19 0.24

    Source: Thomson Financial

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