When I heard that yet another Chinese solar shop was poised to come public on the U.S. market, my first thought was -- not another one! Clearly, I wasn't the only one to feel that way. The thin-film PV module producer has indefinitely postponed its initial public offering, which had been scheduled for today.
At its anticipated midrange offering price of $10 per American Depositary Share (ADS), Trony would have raised $150 million before fees, plus an additional kicker if underwriters JPMorgan Chase
Interestingly, JPMorgan, along with Intel
Trony exited the third quarter with $8.4 million in cash. That $30 million loan was extended in October. The company will just have to make do with these related-party funds until U.S. investors get their solar appetites whetted again.
At first glance, Trony looks like a solar investor's dream. Like First Solar
So is Trony the Chinese First Solar? I have my doubts. Aside from only achieving around 6% efficiencies in volume manufacturing, the firm's financial numbers just don't look sustainable. Look at selling, general, and administrative costs as a percentage of revenue in the last fiscal year: 4.5%!
I know labor is cheap, but that's ridiculous. So is committing just 1% of sales to research and development in this hypercompetitive and fast-changing industry (though Trony is hardly alone in underfunding R&D).
The comparable trailing-12-month figures at First Solar are 12.1% and 3.5%, respectively. At Suntech Power