We had a couple posts last week pointing out the relative outperformance of Chinese vs. American solar's. Yesterday Oppenheimer came out with some negative comments on the Chinese group. From:
LDK Solar (LDK), Canadian Solar (CSIQ), and JA Solar Holdings (JASO) have high expectations for Chinese solar subsidies.
Chinese solar companies have been on a tear in recent weeks amid speculation that the government would provide a hefty subsidy for the industry. The government has promised to commit 210 billion RMB (US$30 billion) out of its 4 trillion RMB (US$585 billion) stimulus package to green initiatives, according to a report by the National Development and Reform Commission last week.
However, the government’s plan to boost the solar industry remains somewhat unclear. The government initially said that it was considering a 20 RMB (US$2.93) per watt subsidiary for solar energy. However, only 2.5 billion RMB (US$366 million) has been slated for the program to date, which would only support about 180 megawatts of energy – not a sizable amount for the industry.
Today, Oppenheimer predicted that investors will be disappointed by the impact of Chinese solar subsidies. The firm believes that the street is overestimating the effects of the subsidies, and contends that the current situation resembles prevailing sentiment in mid-2008, when analysts became too excited about subsidies that were going to be enacted in Italy and Greece....MORE
