Late-year demand seen as making up for lackluster quarters
Time (EDT)12:003:00
US:YGE
US:TSL
US:JASO
0.0%-5.0%-2.5%2.5%5.0%
Getty Images
SAN FRANCISCO (MarketWatch) — A second-quarter miss for Yingli Green Holding on Wednesday was a fitting end to an earnings season that most Chinese solar-panel makers would probably like to forget.
Once high-flying stocks, the likes of YingliYGE, -5.06% and rivals Trina Solar Ltd.TSL, +1.46% and JA Solar Holdings Co.JASO, +0.38% have underperfomed the broader solar sector.
Their subpar showing so far has clouded the second half of the year, which traditionally makes up for seasonally lackluster first and second quarters.
TimeTrina Solar Ltd. ADSJul 14Apr 14
8/24/2014
US:TSL13.37
US:TSL
$7.5$10.0$12.5$15.0$17.5$20.0
Many analysts, however, are betting that the second half of the year will come to the rescue again, with China’s lofty solar-power goals keeping demand for solar panels a step ahead of supply.
Potential setbacks include the effect of the additional U.S. tariffs recently imposed on Chinese-made panels, although the tariffs have had a rather subdued effect on prices so far.
Companies are selling more of their wares in China, long regarded as a key market. The low price that solar panels fetch in China, however — about 55 cents per watt compared with more than 60 cents per watt elsewhere — have hurt companies’ bottom lines in the second quarter.
Yingli earlier reported a larger-than-expected quarterly loss, and, crucially, cut down its expectations for solar-panel shipments this year. Yingli’s U.S.-listed shares were recently down 3.1% , after starting the day down more than 7%. So far this year, Yingli U.S.-listed shares have tumbled 32%.
TimeYingli Green Energy Holding Co. Ltd. ADSMar 14Jul 14
8/21/2014
US:YGE3.59
US:YGE
$2$4$6$8
On Tuesday, Trina Solar, which got slapped with U.S. tariffs that were smaller than the industry average, also disappointed investors. Trina’s sales were slower than expected, and average prices went down, also because the company did more of its business in China.
The company, however, kept intact its 2014 shipment forecast. Trina’s U.S.-listed shares, up 2.4% on Wednesday, have declined 8% so far this year. JA Solar shares are up 1.3% this year.
That compares with gains of 25% this year for the Guggenheim Solar exchange-traded fundTAN, -0.84% and 8.2% for the S&P 500 index.SPX, +0.00%
The companies’ strategy of looking to sell more in China is expected to pay off in the long run, however.
TimeJA Solar Holdings Co. Ltd. ADSMar 14Jul 14
8/24/2014
US:JASO9.23
US:JASO
$8$9$10$11$12$13
With a slew of incentives in place to reach its 2014 solar-power goals, China is likely to meet the demand expectations markets have pinned on it, said Jade Jones, an analyst with GTM Research.
Moreover, by the end of the year the companies, which mostly absorbed the higher costs due to the U.S. tariffs, will likely see improvements in the U.S. market as well, she added. Upticks in demand are also expected in Japan, another key market.
For Trina, the lower tariffs it got saddled with will allow for market share gains in the U.S., Jeffrey Osborne, analyst with Cowen & Co, wrote in a note. Sales in China and Japan will also be strong tailwinds for Trina, he added.
Most analysts covering Trina stock rate it a buy, with the average target price at $18.38 a share, according to FactSet, a full 46% above its current level.
JA Solar has an average target price of $14.20, according to FactSet, a 52% improvement over Wednesday’s price.
Yingli is rated neutral by Wall Street, and its average target price of $4.78 is 46% over its current share price.
Getty Images
选择“Disable on www.wenxuecity.com”
选择“don't run on pages on this domain”
