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

JackLampka (28.68) Submitted: 2/25/07 8:39 AM : Start Price: $39.78 STP Score: -40.12

STP will outperform the market since demand for solar energy will keep growing worldwide over the next several years. However, I wouldn't invest in STP due to the China hype alone. There may be some minor cost advantages for Chinese photovoltaic manufacturers due to lower labor costs, but the biggest costs drivers of photovoltaic cells and modules are costs of raw materials. So, look for solar companies that can reduce costs by volume purchasing of raw materials and by reducing the silicon consumption due to thinner slices and higher efficiency. Chinese companies should of course be able to benefit from the growing off-grid local demand, which in turn will drive the volume and hence reduce the costs per Watt.

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