Yesterday's earnings release by Solarfun Power
I finally figured it out. Take a look at this side-by-side comparison with the first-quarter report of Canadian Solar
Metric |
Solarfun Power |
Canadian Solar |
---|---|---|
Revenue |
$171 million |
$171.2 million |
Shipments |
40.3 megawatts |
41.8 megawatts |
Gross Margin |
16.5% |
16.5% |
Operating Margin |
12.1% |
11.7% |
European Revenue |
100% |
97.9% |
All data from company filings.
Right now, these two Chinese solar players appear to be nearly identical. Mr. Market sees it this way as well and assigns the companies roughly matching enterprise values.
So is there any reason to favor one company over the other? Are they really interchangeable?
A glance at full-year guidance reveals that the companies aren't gunning to grow at exactly the same speed. Solarfun raised its 2008 shipment guidance to the 160- to 180-megawatt range, while Canadian Solar maintained guidance of 200-220 MW. The latter projection excludes production of low-cost "e-Modules," which I've recently eyed with interest.
This is no commentary on the longer-term growth trajectory of the two companies. Solarfun, which has signed agreements with both LDK Solar
For me, Canadian Solar's push into upgraded metallurgical silicon is enough of a differentiator to make me favor the company over Solarfun. Investors appear to be giving the former company little credit for this potentially margin-mutating move.
Related Foolishness:
- This solar player is in wafer wonderland.
- LDK's a future play.
- This company is manufacturing handsome solar profits of its own.