Chinese Solar Companies as Investment Opportunity
| Brian Ohlfest - December 11, 2009 |
This is a great time to invest in companies that will benefit from the attention given at the Copenhagen conference this week. Climate issues continue to attract international attention. With a move to renewable energy in order to reduce carbon emission, a handful of Chinese Solar companies represent opportunity to put money to work. JA Solar (JASO), Trina Solar (TSL) and Suntech Power Holdings (STP) have all been in the recent spotlight.
The best plays in the solar sector may be represented by Chinese solar companies, taking into account a higher demand domestically and lower cost of production. Government stimulus and availability of credit create potential for growth as the Chinese government plans to more than double its “environmental protection” spending through 2015 to as much as $454 billion.
JA Solar (JASO) was up 12.5% on Monday and was recently upgraded to $6 a share price target by Barclays. They predict 2010 earnings of 40 cents per share, or 15x the 2010 book estimate. Barclays analyst Vishal Shah recently increased his rating to overweight from equal weight.
Suntech (STP) has recently signed three long-term supply agreements for up to 490 megawatts of solar modules in Europe, according to the company. Thomas Weisel Partners analyst Jeff Osborne raised his ratings on Suntech to market weight from underweight on Tuesday.
Trina Solar (TSL) has posted big gains this year with the overall market, recently hitting a new 52-week high above $50 after the company reported better than expected Q3 results on Nov. 16, and Zachs has ranked it as a buy.
To conclude, JA Solar, Suntech, and Trina Solar all represent potential plays on Chinese solar companies, both in the near term and as more attention gets placed on alternative energy sources in the future.
Disclosure: none