Chinese Solar Gives American Solar a Run for Its Money

American solar company Evergreen Solar is filing for bankruptcy. Their competitors have driven costs down so significantly that ESLR could not compete, turning the once billion dollar company into a nothing sandwich.

While it may seem like a time to despair for the solar industry, analysts think is may only be a sign of despair for the American solar companies.

That's because it was not American solar companies who undercut prices so harshly that it sent Evergreen bankrupt, it was the Chinese solar manufactures.

In fact, China is undercut them not just because of the old standby -- cheap labor -- but because China is overwhelmingly more conducive, and supportive, of the industry.

"Chinese solar manufacturers enjoy extensive support from government industrial policy. They benefit from inexpensive capital, low-cost electricity and real estate, as well as less-expensive labor," says Mr. Pichel. "The global solar industry is growing quickly, in part because of government subsidies to promote clean-energy production and because of falling panel prices." (via Wall Street Journal)

Demand for solar panels is still high, and expanding worldwide, especially in Asia. It is ultimately the electricity costs and the panel costs are often the final factor in determining who will supply them.

Suddenly, Chinese solar stocks are looking a little more attractive than they did before.

What does this mean for the American solar manufacturers? It seems that even with a strong competitor out of the way, ESLR's bankruptcy may not be a bullish sign for anyone but the Chinese manufacturers who can continue to undercut U.S. profit margins.

Interested in trading on this idea? Below we list key Chinese solar panel manufacture companies traded on the U.S. market.

Do you think bullish times are ahead for these names? Use the data below as a starting-off point in your analysis.

List sorted by market cap. (Click here to access free, interactive tools to analyze these ideas.)

1. LDK Solar (NYSE: LDK  ) : Semiconductor Industry. Market cap of $984.05M. Current price a $6.57. This is a risky stock that is significantly more volatile than the overall market (beta = 2.62). The stock is a short squeeze candidate, with a short float at 21.81% (equivalent to 5.07 days of average volume). The stock has lost 6.54% over the last year.

2. Trina Solar (NYSE: TSL  ) : Semiconductor Industry. Market cap of $947.07M. Current price a $13.58. This is a risky stock that is significantly more volatile than the overall market (beta = 3.05). The stock is currently stuck in a downtrend, trading -18.13% below its SMA20, -26.79% below its SMA50, and -43.72% below its SMA200. It's been a rough couple of days for the stock, losing 13.56% over the last week.

3. Yingli Green Energy (NYSE: YGE  ) : Semiconductor Industry. Market cap of $890.61M. Current price a $5.63. This is a risky stock that is significantly more volatile than the overall market (beta = 3.01). The stock is currently stuck in a downtrend, trading -14.51% below its SMA20, -25.15% below its SMA50, and -45.05% below its SMA200. It's been a rough couple of days for the stock, losing 11.34% over the last week.

4. JA Solar Holding (Nasdaq: JASO  ) : Semiconductor Industry. Market cap of $624.15M. Current price a $3.65. This is a risky stock that is significantly more volatile than the overall market (beta = 2.96). The stock is currently stuck in a downtrend, trading -16.06% below its SMA20, -24.28% below its SMA50, and -43.49% below its SMA200. It's been a rough couple of days for the stock, losing 12.26% over the last week.

5. JinkoSolar Holding (NYSE: JKS  ) : Industrial Electrical Equipment Industry. Market cap of $350.06M. Current price a $14.69. The stock is a short squeeze candidate, with a short float at 29.28% (equivalent to 9.72 days of average volume). The stock is currently stuck in a downtrend, trading -25.% below its SMA20, -34.8% below its SMA50, and -41.55% below its SMA200. It's been a rough couple of days for the stock, losing 7.61% over the last week.

6. Hanwha SolarOne (Nasdaq: HSOL  ) : Semiconductor Industry. Market cap of $331.60M. Current price a $3.95. This is a risky stock that is significantly more volatile than the overall market (beta = 2.5). The stock is currently stuck in a downtrend, trading -18.87% below its SMA20, -26.02% below its SMA50, and -45.87% below its SMA200. It's been a rough couple of days for the stock, losing 10.23% over the last week.

7. Daqo New Energy (NYSE: DQ  ) : Semiconductor Equipment & Materials Industry. Market cap of $199.95M. Current price a $5.69. The stock is currently stuck in a downtrend, trading -11.33% below its SMA20, -19.66% below its SMA50, and -47.65% below its SMA200. It's been a rough couple of days for the stock, losing 8.96% over the last week.

Interactive Chart: Press Play to compare changes in analyst ratings over the last two years for the stocks mentioned above. Analyst ratings sourced from Zacks Investment Research.


Kapitall's Becca Lipman does not own any of the shares mentioned above. Data sourced from Finviz.

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  • Report this Comment On August 19, 2011, at 8:58 PM, busterjones wrote:

    Dont forget the 30.9 Million shares ESLR loaned to Lehman for them to lend out to hedge funds to short their stock. Lehman went into bankrupcy and Barclays obtained the shares. The stock never recovered from this uncertainty, it went from 10/share to 2/share, Many disputes for local noise ordinance at Devens plant that cost them delays and money plus more uncertainty. They did relocate to China to try and savage something but all in all their management team's faulty judgement brought them to bankrupcy compounded by the Lehman bankrupcy and failure to get their shares returned! Litigation is still pending, but the shareholders are screwed, Nice big time short Barclays,,my hats off!

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