Wednesday, June 23, 2010

"Yuan move to help solar cos that export to China" and "Huantai Silicon drops out of an alliance with Suntech to join MEMC" (WFR; STP)

If you look at the bearishness expressed by the short interest and option positioning WFR might be worth a bet.
Big caveat though, I've never understood the trading in this one.
From MoneyControl:

China's pledge to allow a more flexible exchange rate for the yuan would help solar companies that export to China, but could hurt Chinese manufacturers that sell abroad, according to a senior analyst at Wells Fargo Securities.

Exporters such as US silicon maker MEMC Electronic Materials Inc and German chemicals specialist Wacker Chemie AG are well-positioned to benefit the most, partly because a stronger yuan may increase the purchasing power for Chinese companies that source products abroad, analyst Sam Dubinsky said.
In addition, a firmer pricing environment may benefit US-based First Solar Inc and SunPower Corp as well as European and Japanese vendors, as Chinese vendors may need to raise pricing to help offset foreign exchange headwinds, the analyst said....

...Still, China's decision to allow the yuan to strengthen could hurt Chinese panel makers, particularly partially integrated companies such as Suntech Power Holdings Co Ltd, Canadian Solar Inc, and Solarfun Power Holdings Co Ltd, Dubinsky said.

"Chinese panel producers sell mostly in euro/US dollar, but have manufacturing costs in renminbi; a stronger renminbi could negatively impact margin for these companies," he said.
Vertically integrated vendors such as China's Trina Solar Ltd and Yingli Green Energy Holding Co Ltd face less margin risk when compared with partially integrated vendors, the analyst said...MORE

From Greentech:
Chinese wafer supplier Huantai Silicon has suspended its partnership with the country's solar cells and panels giant Suntech Power on their joint venture Glory Silicon, and will jointly build a new venture with U.S. veteran wafer producer MEMC Electronic Materials.
Glory Silicon, established on the assets of Huantai Silicon, has served as an affiliate of Suntech since May 2008. But now, Glory Silicon is about to be restructured, with its 600 Megawatt of annual wafer production capacity.
"We definitely no longer cooperate with Suntech," Sophia Yuan, Huantai Silicon's CEO assistant, said in a telephone interview on Tuesday. Details of this matter would not be announced until October, she added.....MORE