SOURCE: Research Driven Investing
NEW YORK, NY--(Marketwire - Mar 29, 2013) - Chinese solar equities have experienced a sharp decline in recent weeks as Suntech Power's recent bankruptcy has raised concerns that other Chinese manufacturers may be over-leveraged. Ticker Spy's Chinese Solar Stocks Index (CHSOL) has fallen over 35 percent in the past month. Research Driven Investing examines investing opportunities in the Chinese Solar Industry and provides equity research on LDK Solar Co., Ltd. (NYSE: LDK) and Trina Solar Ltd. (NYSE: TSL).
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The China Daily recently reported that the China Banking Regulatory Commission (CBRC) has warned banks to "pay close attention to the credit risks in key industries affected by the economic downturn and hit by overcapacity woes." In an attempt to protect themselves from risks associated with the solar industry Chen Yuan, chairman of China Development Bank, has stated his bank will begin to curb new loans to solar panel manufacturers.
"There clearly will be pressure on other Chinese stocks with heavily leveraged balance sheets and non-existent cash flows," said Gamco's Gabelli Green Fund, David Smith, by e-mail March 22nd according to Bloomberg. "The outlook also is strained by Suntech continuing its production. Suntech probably will have to discount their panels more to sell them, putting downward pressure on market pricing."
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LDK Solar manufactures polysilicon, mono and multicrystalline ingots, wafers, cells, modules, systems, power projects and solutions. Shares of the company have fallen roughly 35 percent in the past month. LDK Solar reported net sales of $291.5 million for the third quarter of fiscal 2012, compared to net sales of $471.9 million in the year ago quarter. The company is expected to release results for the fourth quarter and full year 2012 on Monday, April 29th.
With more than 12 offices worldwide, Trina Solar has partnerships with leading installers, distributors, utilities and developers in all major PV markets and is listed on the NYSE. The company reported solar module shipments for the full year 2012 totaled 1.59 GW, an increase of 5.4 percent when compared to a year ago. Shares of Trina Solar have fallen roughly 10 percent in the past month.
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