Saturday, May 30, 2009

Chinese solar stocks soar as earnings plummet. And: Chinese Solar Index Takes Top Spot

We've been beating this drum publicly for two months* and I am starting to feel a bit of acrophobia.
Two examples, are Trina and Yingli. Since our March 31 post "A Bifurcated Market in Solar Stocks (ENER; FSLR; LDK; SPWRA; TSL; YGE)" Trina is up 137.7% (and is up 315% from it's March 2, YTD, bottom) while YGE is up 112.6% and 279.8%.
From Greenwire via the New York Times:
Chinese solar equipment manufacturers have taken a big hit in the economic downturn. But you wouldn't know it from the way their stock values have been performing lately.

This month, most major Chinese suppliers of polysilicon feedstock and solar photovoltaic equipment have reported their first-quarter earnings, and all are negative. The companies blame their woes on plummeting demand in Europe, tight access to capital caused by the recent credit crunch, and a competitive race for market share that is pushing down the prices of their products.

But Chinese solar companies have been among the strongest performers on the New York Stock Exchange and NASDAQ in recent weeks, outpacing their U.S., Japanese and European counterparts even before the dismal figures came in. Virtually all Chinese solar stocks spiked in trading yesterday.

This morning, Changzhou-based Trina Solar Ltd. (NYSE: TSL) reported that its revenues slid by more than 38 percent in the first quarter compared with the previous fiscal period. The company pulled in roughly $132 million over the first three months of the year, compared with $216.3 million at the end of 2008.

But the company's stock has been on a tear over the past couple of months, rising in value by more than 42 percent so far in May alone, from $15.90 to $22.62 at the close of yesterday's trading. Trina is now one of the highest-valued Chinese solar stocks on the market....MORE, including a look at other names.
Here's Tickerspy:
Can anything hold these stocks back?

A look at the Chinese solar sector's massive aggregated first-quarter losses would suggest that the stocks are getting crushed. Instead, these companies are flying, some by over 30% in the last week, and investors relieved that the companies made it through the worst of the economic rough patch. Today the industry is soaring, with most stocks adding more than 5% to their weekly tallies.

As a whole, the Chinese Solar Stocks Index is up by 4.7% [for the day -ed]. It is crushing the S&P 500 by 58% this month.

The most recent earnings news came from Trina Solar (NYSE: TSL - News), which reported a loss of $10.6 million or 42 cents a share in the first quarter. After excluding one-time expenses, the company recorded adjusted earnings per American Depository Share (ADS) of 2 cents, surprising analysts, who expected an -8 cent loss. Today the stock is an industry laggard, adding 1% to its 20% weekly run.

Suntech Power (NYSE: STP - News), China's largest solar equipment producer, announced today that it closed its 23 million ADS follow-on public offering. Net proceeds from the offering are approximately $277 million. The stock is up by 6% today, adding to its 31% run over the last week.

Canadian Solar (NASDAQ: CSIQ - News) and Yingli Green Energy (NYSE: YGE - News) are both having big days, trading up by more than 6%. Yingli is the Index's top performer this week, adding 35% over five days after receiving a price target increase from Collins Stewart on Monday....

...As of this writing. the Chinese Solar Stocks Index is the top performing tickerspy Index over the last month, gaining 63%....MORE

While the Tickerspy Chinese solar index is up for the month and since our posts, it is still down from it's all time high by a huge amount:

Today: +5.3%
1-month: +63.5%
All-time: -75.1%
The stocks were also up in late after hours trading Friday but I am feeling skittish and could probably get spooked by someone saying "Boo". Keep those mental stops tight.

*See also:
JA, Trina Solar Leads Chinese Solars Higher (JASO; TSL; YGE)

China solar set to be 5 times 2020 target (LDK; TSL: YGE)

China Takes Steps To Rebalance Its Solar Industry (ENER, FSLR, LDK, SPWRA, TSL, YGE)

American vs. Chinese Solar Stocks

Solar: And Now, The Rest of the Story (LDK; TSL; YGE)