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cbwang888 (25.56)

Undervalued Chinese solar companies --- Buy them all on the fire sales

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8

June 11, 2008 – Comments (6) | RELATED TICKERS: HSOL , STPFQ , YGE

 

As 6/11/08, major Chinese polysilicon solar players are down 30%+ from its recent high. It appears that the bull runs start before earnings and it peaked on or a few days after the BLOWOUT earning.

Hurt by thin-film solar competition talk? FSLR insider stock sales talk? German tariff cut?

This is typically what happens to those buying on headlines.  Now all these stocks came down to the level before the earning run, it makes me think price at this level are very attractive given that all earning reports from these solar players are all positive and the growth for Solar in the next 5 years are real and here to stay.

Oil crisis are now the top headline on CNBC. Soaring crude oil price (@$136) is making solar stocks even more attractive. 

Here comes my top 5 list of Chinese solar stocks to buy: (1 year target)

 

1. SOLF (strong buy @ $19.5): target $33

    Story on 5/21:

     (AP Wednesday May 21, 10:00 am ET) The stock climbed $3.22, or 12.8 percent, to $28.46. ....Early Wednesday, Solarfun said its first-quarter earnings rose to $15.3 million, or 32 cents per     American Depositary Receipt, on $131.3 million in revenue, as higher selling prices offset higher     raw-materials costs. The results blew past Wall Street estimates of 16 cents per ADR.

    

    It beats handsomely by 10 cents if not counting the currency gain of 6c. If counting no EPS growth for the next 3 Qtrs, the forward P/E will be 19.5/(4*.26) ~= 19.5

    That is darn cheap for growth stocks like SOLF. 

 

2. STP (strong buy @$38): target $60

  (AP Friday May 23, 5:12 pm ET) ...Adjusted earnings roughly doubled to 35 cents per ADS on revenue of $434.5 million. Analysts were expecting, on average a profit of 28 cents per ADS on revenue of $378 million, according to a poll by Thomson Financial. ...... Merriman Curhan Ford analyst Brion D. Tanous reiterated his "Buy" rating and raised his 2008 revenue estimate to $2 billion from $1.9 million but lowered his per share profit estimate by 3 cents to $1.64. Analysts expect a profit of $1.57 per share, with $1.99 billion in sales......Shares advanced $1.94, or 4.3 percent, to $46.89, after earlier climbing as high as $47.49.


3. YGE (strong buy @$17.6): target $29

 (AP Thursday May 15, 9:23 am ET) ...

Net income for the three months ended March 31 increased to $31.9 million from $1.2 million. Earnings per American depositary share were 25 cents, compared with a per-ADS loss of 36 cents a year ago, which reflects the redemption of preferred shares.

Excluding one-time charges for amortization and stock-based compensation, the company earned 27 cents per share in the recent quarter. Analysts polled by Thomson Financial expected, on average, earnings per share of 19 cents....

 

4. TSL (strong buy @$38): target $55

 (AP Friday June 6, 8:45 am ET) ...For the three months ended March 31, the company earned $12.9 million, or 51 cents per share, compared with $4.8 million, or 22 cents per share, during the same period a year earlier....

 

5. LDK (strong buy @$38): target $52

(AP Monday May 12, 4:56 pm ET) ... Net income rose to $49.8 million, or 45 cents per share, compared with $49.2 million, or 44 cents per share, during the same period a year earlier... Analysts expected the company to earn 39 cents per share, on average, according to a survey by Thomson Financial.

 

Enjoy 50%+ gain in 1 year! 

6 Comments – Post Your Own

#1) On June 11, 2008 at 9:55 PM, JoHooch (< 20) wrote:

SOLF looks best, followed by LDK, from technical standpoints.  The others look like they will fall further before finding support.  News could swing these things either way though.  So volatile.

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#2) On June 11, 2008 at 11:33 PM, kristm (99.73) wrote:

Why would you buy Chinese solar? China will just keep sucking up oil from all the other countries and making illegal under-the-table deals with countries like Darfur that murder their own citizens in order to keep pulling minerals and petroleum out of the ground. They buy stuff we can't touch because they don't care what kinds of evil their buying funds. China doesn't need solar, or at least not as bad as the US does.

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#3) On June 12, 2008 at 11:50 AM, OzzieBlaze (< 20) wrote:

Thanks for the excellent article. For all of those people who say "ah man If only i got into google when it was cheap"...this article is a moment of clarity. Personally I worked the #s and I also worked my research on overall company endeavors, brand name, ceo's, and reputation both for the economy and for the wellness of environment and SOLF pulls out pretty well. @ 18$ I think I will trail it for a little and buy into it next week and hold long term, hopefully the price comes down another dollar or so. thanks again for the insider tip. 

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#4) On June 13, 2008 at 3:16 PM, cbwang888 (25.56) wrote:

SOL is making a reversal today

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#5) On June 22, 2008 at 1:37 PM, goldminingXpert (29.57) wrote:

I'm short SOLF--I don't know if the earnings are A) A fluke, or B) illegally manipulated, but either way, they will go away soon.

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#6) On September 04, 2008 at 1:03 PM, cbwang888 (25.56) wrote:

LDK hits $52 target in 3 month ... 50% gain

DateOpenHighLowCloseVolumeAdj Close29-Aug-0851.7852.4051.1051.262,292,80051.26

 STP currently 10% gain. SOLF,YGE and TSL are laggards.

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