From Tech Trader Daily:
Plenty of nice things being said about Chinese solar technology provider Suntech Power (STP), but also some lingering caution, following its analyst day in New York yesterday. The shares are nevertheless down 4 cents today at $9.Yesterday:
In conjunction with the meeting, the company forecast $2.78 billion to $2.83 billion in revenue this year, comfortably ahead of the Street’s $2.74 billion estimate, and a 17% gross profit margin and 6.5% operating margin.
Through a joint venture with Wuxi Industrial Development Group, the company expects to boost production capacity next year, with installed cell and module production capacity going to 2.4 gigawatts by the end of 2011, form 1.8 gigawatts expected this year, and installed wafer capacity going to 1.2 gigawatts from 500 megawatts this year. For 2011, the company sees revenue of $3.4 billion to $3.6 billion, and EPS of $1.40 to $1.60. The Street has been looking for $3.02 billion and 88 cents EPS.
Amy Song with Goldman Sachs raised her rating on Suntech to Neutral from Sell, arguing the company’s internal production of solar wafers should boost its gross profit margin. The company will be the largest branded solar panel module maker in China in terms of capacity, Song writes, while the stock’s 13% fall since the end of June fairly reflects the risk of a higher cost structure and a “stretched balance sheet.” Song expects gross profit to improve to around 20% in Q1 and Q2 of next year. Song’s price target is $9. Song’s top pick, however, is Hong Kong-listed GCL Poly, which is aiming to become the largest wafer manufacturer in the world, she observes. Its 100% internal supply of wafers should give the company a “compelling” cost advantage versus other manufacturers....MORE
Press Release: Suntech says Happy Days are Here Again (STP)
Saturday, reposted Monday:
Repost: Auriga Upgrades Suntech to 'BUY', Raises Price Target (STP)
