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$7.31 -0.69 (-8.63%)
12/4/2008 4:00 PM

Suntech Power Holdings Co., Ltd. (ADR) (STP)

CAPS Rating:
****

A solar energy company that designs, develops, manufactures and market a variety of PV cells and modules. Also provides PV system integration services in China.

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Avatar Ganndalf (< 20) Submitted: 9/26/07 1:37 AM : Outperform Start Price: $41.55 STP Score: -38.79

This is one of my three best ideas right now as a LTBH investor. It is the largest company in my portfolio at 22% so I'm expecting very big things from STP over the next 5 years. TMFEldrehad is betting against them right now, but I think I've got him on this one. A forward p/e of 26 and LT annual growth rate estimate of 40% spells bargain growth in my book. Solar was laughed at for a long time, but I think those days are swiftly coming to a close. Government subsidies for solar deployment in Germany, California, and China, for example. are going to play a huge part in making this technology economically attractive to business and residential customers. SunTech has been profitable the last three years, which is pretty rare in the solar industry. Net profit margins TTM are 13.5%. This company has a very passionate, innovative, and intelligent founder and CEO, which is far from its least important benefit. The planet is going Green, and the global market opportunity here is absolutely massive over the next 10 years. STP is a leader in its industry and is well poised to exploit its many advantages over the competition, such as unsurpassed cost efficiencies and a well secured silicon supply at a fixed price.

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Avatar MGDG (25.37) Submitted: 10/14/07 11:58 PM

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If you could pick only one solar stock, this would have to be it. The founder Shi Zhengrong has a background in optics and earned his Ph.D. in Australia at U.N.S.W. in Sydney 15 years ago. It was here he became a researcher and developer of solar technology.
In 2000 Dr. Shi returned to China and with the help of local investors in the city of Wuxi, they founded Suntech Power in 2001. With production cost high and margins low, Dr. Shi decided low tech was better than high tech. Dr. Shi bought out the local investors and took the company public on the NYSE.
The low cost expansion path he took is profitable and scalable for high growth. They have the lowest production cost per watt in the Industry. The cost of Silicon now represents 80% of their production cost. If the cost of Silicon falls a little, their margins will widen dramaticly over the competition.
The price of Solar panels should steadily fall in price and it will be those companies that can scale up quickly that will profit in this enviroment. Suntech Power is in position to be that company. They are also the only pure Solar power play with the ability to dwarf the competion in scalability and profitability.
The big players are conglomerates such as General Electric, Sharp, British Petroleum and Kyocera. Dr. Shi is also looking at producing small micro cap competitors products so they can profit off others patented technology. Whatever happens Dr. Shi will make sure they stay one step ahead of the competition.

Fool on Granndalf and make money.
---Duane

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