Monday, August 10, 2009

Piper Jaffray Starts Trina Solar at Overweight (TSL)

Piper was co-manager (CS, GS joint bookrunners) on Trina's recent 4.5mm share offering at $28.75. The stock was recently trading at $29.75, up $1.16. From StreetInsider:

Piper Jaffray initiates coverage on Trina Solar (NYSE: TSL) with an Overweight rating and $37 price target.

The firm cited the following key points:

  • second largest integrated solar company in China after Yingli (NYSE: YGE)
  • Vertical integration may be a superior mode
  • Poly supply secured by long-term contracts without the burden of a poly plant
  • Trina is a likely shared beneficiary of subsidies in China
  • Compared with STP and YGE that sell mostly through distributors in Germany, TSL sell mostly directly to small and medium size developers/installers outside of Germany, which makes the company more susceptible to the credit crisis. However selling direct allows it to achieve modestly higher ASPs, and its customers in potentially higher growth markets may grow faster than average German installer in 2010/2011
  • Product not differentiated