Solar Power Stocks to Watch: Cypress (CY) & Solar Power (SPWR)
Friday, October 19th, 2007 at
10:48 am
Oct. 19, 2007 by AskAME.com
Cypress Semiconductor has been outperforming the S&P 500 for months now and has been hitting new highs while other stocks in the chip making sector have been flat lining.
Upon investigating the source of the price imbalance AskAME.com discovered that the secret was a solar panel chip technology company, publicly traded, of which Cypress is a majority owner. Furthermore that little solar company reported earnings yesterday and it is up over 250% year-over-year.
Here are the Fidelity & Charles Schwab (exactly the same) description of CY, “Cypress Semiconductor Corporation (CY) provides silicon-based products andsolutions. It offers programmablesystem-on-chip (PSoC) products, universal
serial bus (USB) controllers, wirelessUSB, programmable clocks, and RoboClock family of clock buffers, as well as programmable-radio-on-a-chips.”
TDAmeritrade sheds a little light on this stock’s more direct solar connection, “Cypress Semiconductor Corporation (Cypress) delivers mixed-signal, programmable solutions. The Company’s offerings include the programmable system-on-chip products, universal serial bus controllers, general-purpose programmable clocks and memories. It also offers wired and wireless connectivity solutions. It serves numerous markets, including consumer, computation, data communications, industrial and, through its subsidiary SunPower Corporation (SunPower), solar power. It operates in five business segments: Consumer and Computation Division, Data Communications Division, Memory and Imaging Division, SunPower and Other. During the fiscal year ended January 1, 2006 (fiscal 2005), it acquired SMaL Camera Technologies, Inc. and also acquired Cypress MicroSystems. In March 2007, it completed the sale of its Silicon Valley Technology Center, to Oak Hill Capital Partners and Tallwood Venture Capital. During fiscal 2007, SunPower completed the acquisition of PowerLight Corporation.”
Aside from the obvious silicon chip manufacturing angle (photovoltaic solar panels are made of specialized silicon chips) Cypress has been ahead of the curve on solar energy by purchasing or spinning off SunPower Corporation (Nasdaq: SPWR).
SunPower Corporation engages in the design, development, manufacture, and
marketing of solar electric power products primarily in the United States, Germany,and Asia.
This little gem released their quarterly report Oct. 18th, 2007. Here are the highlights:
* Q3 2007 revenue of $234.3 million, up 258.6 percent year on year – 466-megawatt solar cell Fab 2 dedicated and production ramping on first two lines
* Achieved 20.1 percent efficiency world record for mass produced solar panel
* $24.7 million, three-year Solar American Initiative agreement signed with U.S. Department of Energy
* Dedication of first of 28 Macy’s solar electric systems in California – 18-megawatt Olivenza Spanish solar power plant order booked in October
Todays pullback in the markets provides a buying opportunity for both stocks. CY and SPWR are were both trading at 52 week highs yesterday. I suspect the solar connection is what has propelled CY above other semiconductor makers catagorized along with it. This incorrect analogy creates an informational imbalance that suggests Cypress will continue to be a low risk high reward stock pick.
SPWR certainly represents a higher risk with a much lower capitalization than its parent company, however it has proven itself to be a highly profitable company with tremendous upside should the cost of traditional sources of energy remain high or continue to climb.
Semiconductor makers as a group have moved sideways over the same period of Cypress Semiconductors meteoric rise.
Note below how the Cypress Semiconductor price has climbed…
…virtually in tandem with its subsidiary Sun Power (which went public in late 2005).
The BatteryMINDer Solar Charging System is an ideal choice for 12 Volt battery operations. This complete system is specifically designed for charging and maintaining up to four 12V batteries of any size/type/brand. Extends performance and life of 12V lead-acid, maintenance-free, marine deep cycle and sealed AGM batteries. Fully automatic desulfator dissolves life-shortening sulfate using safe low voltage high frequency pulses. Charges: Yes, Maintains: Yes, Desulfates: Yes, Conditioner: Yes, Works With: 12V lead-acid batteries, Amps: 1.25, Trickle Charge Amps: Regulated up to 1.25A, Charges Multiple Batteries (qty.): 4, Overcharge Protection: Yes, Polarity Reversal Protection: Yes, Power Source: Solar panel, Power Cord (ft.): 20in. from panel to controller Built-in automatic desulfator Not for use with aircraft batteries
PowerG Grid-Tie Solar System offers this grid-tie solar system that is designed for residential and commercial applications. The kit provides an investment-grade array of solar panels, inverters, racking and technical support to capture the power of the sun for your home or business. High-performance 240 Watt, 72 cell monocrystalline solar panels (64.6in.L x 39.1in.W x 1.8in.H) collect power and heavy-duty, 60Hz based inverter converts solar energy to grid-tie compliant AC power. Call 888-955-3469 for free online evaluation and quote. Common Usage: Grid-Tie System, Panel Type: Monocrystalline, Solar Panel Wattage: 240 Per panel, Rated Watts (kW): 2.88, Dimensions L x W (in.): 64 5/8 x 39 1/8, Thickness (in.): 1 13/16, Material Type: 72 Cell monocrystalline, Solar Panels Included (qty.): 12, Battery Qty.: 0, Mounting Hardware Included: Yes Reduce or even eliminate electrical bills; in some cases system can spin meter backwards and sell excess electricity back to the utility
PowerG Grid-Tie Solar System offers this grid-tie solar system that is designed for residential and commercial applications. The kit provides an investment-grade array of solar panels, inverters, racking and technical support to capture the power of the sun for your home or business. High-performance 240 Watt, 72 cell monocrystalline solar panels (64.6in.L x 39.1in.W x 1.8in.H) collect power and heavy-duty, 60Hz based inverter converts solar energy to grid-tie compliant AC power. Call 888-955-3469 for a free online site evaluation and quote. Common Usage: Grid-Tie System, Panel Type: Monocrystalline, Solar Panel Wattage: 240 Per panel, Rated Watts (kW): 2.18, Dimensions L x W (in.): 64 5/8 x 39 1/8, Thickness (in.): 1 13/16, Material Type: 72 Cell monocrystalline, Solar Panels Included (qty.): 9, Battery Qty.: 0, Mounting Hardware Included: Yes Reduce or even eliminate electrical bills; in some cases system can spin meter backwards and sell excess electricity back to the utility
PowerG Grid-Tie Solar System offers this grid-tie solar system that is designed for residential and commercial applications. The kit provides an investment-grade array of solar panels, inverters, racking and technical support to capture the power of the sun for your home or business. High-performance 240 Watt, 72 cell monocrystalline solar panels (64.6in.L x 39.1in.W x 1.8in.H) collect power and heavy-duty, 60Hz based inverter converts solar energy to grid-tie compliant AC power. Call 888-955-3469 for free online evaluation and quote. Common Usage: Grid-Tie System, Panel Type: Monocrystalline, Solar Panel Wattage: 240 Per panel, Rated Watts (kW): 7.92, Dimensions L x W (in.): 64 5/8 x 39 1/8, Thickness (in.): 1 13/16, Material Type: 72 Cell monocrystalline, Solar Panels Included (qty.): 33, Battery Qty.: 0, Mounting Hardware Included: Yes Reduce or even eliminate electrical bills; in some cases system can spin meter backwards and sell excess electricity back to the utility
PowerG Grid-Tie Solar System offers this grid-tie solar system that is designed for residential and commercial applications. The kit provides an investment-grade array of solar panels, inverters, racking and technical support to capture the power of the sun for your home or business. High-performance 240 Watt, 72 cell monocrystalline solar panels (64.6in.L x 39.1in.W x 1.8in.H) collect power and heavy-duty, 60Hz based inverter converts solar energy to grid-tie compliant AC power. Call 888-955-3469 for free online evaluation and quote. Common Usage: Grid-Tie System, Panel Type: Monocrystalline, Solar Panel Wattage: 240 Per panel, Rated Watts (kW): 5.76, Dimensions L x W (in.): 64 5/8 x 39 1/8, Thickness (in.): 1 13/16, Material Type: 72 Cell monocrystalline, Solar Panels Included (qty.): 24, Battery Qty.: 0, Mounting Hardware Included: Yes Reduce or even eliminate electrical bills; in some cases system can spin meter backwards and sell excess electricity back to the utility
Optimizes all solar panels charge rates. Prevents over/under charging. Full time desulphation pulses safely extends life and performance of all batteries. Features exclusive U.S. Patented PulseMode desulphation circuitry, designed to safely remove sulphation. Charges: Yes, Maintains: Yes, Desulfates: Yes, Conditioner: Yes, Works With: All batteries / 12V lead-acid, Amps: .45, Trickle Charge Amps: Regulated up to 0.45 as needed, Charges Multiple Batteries (qty.): 1, Overcharge Protection: Yes, Polarity Reversal Protection: Yes, Power Source: Solar panel, Power Cord (ft.): 20 Not for use with aircraft batteries
California’s efforts to shore itself up as the friendliest cleantech state in the union got a boost Monday, as the Chinese photovoltaic solar-cell maker Suntech Power Holdings officially opened shop in San Francisco.
Suntech is one of the world’s largest solar-panel makers, pulling in $599 million in sales last year and a year-over-year growth rate approaching 150 percent, according to recent filings.
San Francisco Mayor Gavin Newsom said Suntech’s arrival could help establish the city as a center of a fast-growing industry that still hasn’t formed a dominant hub in the United States.
“We had a lot of folks trying to get this headquarters announcement in their city,” Newsom said Monday at a press conference, according to the San Francisco Chronicle. “For them to be in San Francisco is a big win.”
Suntech has said that a key to the company’s decision was California’s Solar Initiative, which began last January and will offer $2.9 billion in tax rebates to encourage the installation of 3,000 megawatts of solar capacity in the state over the next 10 years.
According to Suntech, California companies already make up 70 percent of the solar maker’s U.S. customer base — including such large, high-profile, San Francisco-centered projects as a 500 kW solar-power system at the airport, and a glass-on-glass solar demonstration project at the California Academy of Sciences.
Suntech previously revealed its plans to move to California to Greentech Media in September.
Chinese Solar Power Company Sees U.S. As Next Big Growth Market
October 24, 2007: 08:05 PM EST
Oct. 25, 2007 (Investor’s Business Daily delivered by Newstex) —
Germany’s belief in solar power (OTCBB:SOPW) — and strong subsidies — has made that gray-skied country the world’s largest solar market.
But Suntech Power Holdings STP sees bigger promise in the U.S.
The world’s fourth-largest solar cell maker on Tuesday opened its U.S. headquarters in San Francisco.
The U.S. was the third-largest market for solar panels last year, and some analyst think it will slip to No.4 when this year is tallied. But the Wuxi, China-based Suntech says abundant sunshine and leadership from states such as California will propel the U.S. to the top of the market within five years.
“The main thing that has to change, which will happen, is the price of the product has to come down, which means the price of silicon has to come down,” said Steve Chan, Suntech’s chief strategy officer.
The U.S. now is many megawatts shy of the lead spot.
Banking On U.S.
Suntech’s U.S. sales still are tiny. The U.S. market accounted for just 3% of its $599 million in revenue last year. Germany was tops with 42%. Suntech also sold more of its systems in China and Spain than in the U.S.
Chan said U.S. sales could account for 10% of Suntech’s 2007 sales. Globally, the U.S. lags in solar installation.
Germany accounted for 55% of the 1.7 gigawatts of new photovoltaic capacity last year, according to industry research firm Solarbuzz. Japan was second with 17%. The U.S. market absorbed 8%.
Some analysts predict heavy subsidies in Spain will vault that nation ahead of the U.S. for 2007.
But spiking oil prices are keeping U.S. and European governments interested in solar power. That means subsidies.
California leads the U.S., with an 11-year, $3.4 billion initiative to subsidize solar panels on up to a million roofs. Other states have weaker incentives. Analysts say it will take a large national incentive program to drive more U.S. demand.
But even without stronger U.S. demand, Suntech is boosting sales.
Its 2006 revenue of $599 million was up 165% from the year before. In the second quarter, sales were up 148% to $317.4 million.
Suntech has ramped up production, too, outstripping the deals its signed to supply silicon, the raw material of solar cells. That’s forced the company to buy silicon on the much more expensive spot market.
“They’ve taken the tact to worry less abut gross margins and worry more about ramping their top line,” John Hardy, an analyst with American Tech, said.
That’s pinched margins and spooked many investors.
Suntech has signed new supply agreements that should help, and more silicon should hit the market in 2008 and 2009.
The shortage of silicon has created a bottleneck for the industry. That drove up prices, which in turn, spurred more development of silicon sources.
ThinkEquity Partners analyst Budong “Peter” Peng says capacity could double by 2009, and then double again in a few more years.
“Silicon could become a commodity in next three or four years,” he said.
Meanwhile, Suntech has hedged its bets. It’s investing in flexible thin-film technology. That technology uses little or no silicon and produces flexible cells, though typically at lower efficiency rates.
Suntech also is pushing into building-integrated photovoltaics. Last year, it bought MSK, a Japanese maker of BIPV systems. BIPV incorporates energy-creating solar cells into standard building materials such as windows and roof tiles. The results are buildings that produce power, without the added costs or political statements of large solar panel arrays.
Both of those technologies are still a small part of Suntech’s business and the overall solar market.
The MSK deal came with some expensive low-margin inventory, though the company said it already has gotten through most of that.
At the same time, it is ramping up overall production.
The company ended 2005 with an annual capacity of 150 megawatts. By the end of 2006, capacity increased to 270 megawatts. It says it is on track to reach 480 megawatts by the end of this year. Suntech has exceeded its projected capacity growth in the past. A megawatt is about what it takes to power about 1,000 U.S homes.
The main push now is to make standard ground- and roof-mounted solar panels more efficient.
Suntech says next year it will deliver panels with 20% efficiency — meaning they convert 20% of the available sunlight that hits them into electricity.
The industry standard is about 16%. But San Jose-based competitor Sunpower SPWR already sells panels above the 20% efficiency mark. It says 22% is coming soon.
Chinese Manufacturing
Still, analysts say Suntech’s cells are pretty good, if not the best. But its low-cost Chinese manufacturing base gives it a leg up.
“They’re definitely becoming known, I would say, as the best modules for the money,” said Paul Clegg, analyst with Jefferies (NYSE:JEF) & Co.
Zhengrong Shi, Suntech’s chairman and chief executive, formed the company in 2001. Today, Suntech has 4,000 employees and four production sites in China. Its shares began trading on the New York Stock Exchange in 2005.
It posted 68 cents per American depositary receipt last year, up from 30 cents the year before. It reported 25 cents per ADR in the second quarter, up 47% from a year earlier.
Analysts surveyed by Thomson Financial expect $1.03 this year, and $1.62 next.
Peng says even Suntech’s competitors thinks the company is on the right track. ThinkEquity surveyed Chinese solar companies about who they thought would be the eventual solar winner in China.
“Each and every company answered ‘us and Suntech,’” Peng said.
Sunpower (SPWR) is up 32% at $127.77 since we wrote this piece. The stock has been propelled by news of expansion into the US market and rising crude oil prices. Photovoltaic solar panels continue to become more cost effective as fossil fuel prices skyrocket.
Looks like Sunpower is not the only stock that is doing will in the solar space. Check out this article from Forbes on 10/26/07 by Carl Gutierrez
Investors couldn’t seem to buy enough shares of Evergreen Solar on Friday as the company reported improving quarterly results and performance, bringing needed confidence to the value of the solar company.
Share of Evergreen lifted 15.9%, or $1.47, to close Friday at $10.70. Its shares have traded in a range of $6.97 to $13.21 over the past 52 weeks.
Evergreen (nasdaq: ESLR – news – people ), based in Marlboro, Mass. , is a manufacturer of solar power products with its proprietary, low-cost String Ribbon wafer technology.
According to Pacific Growth Equities analyst Michael Horwitz, by using less silicon, the company’s novel approach to its solar technology leaves it less vulnerable to the supply problems experience by its peers over the last few years.
The third-quarter results, which were announced after the bell closed on Thursday, posted sales of $18.2 million, beating Wall Street’s expected $17.0 million. Its loss of 4 cents per share also came ahead of Wall Street’s expect 6 cents per share.
Horwitz credited the day’s rise to emboldened investor confidence.
The solar-products company narrowed its loss in the third quarter on cost-control initiatives and said it expects to narrow its loss again in the fourth quarter on continued improvements. Profits from EverQ, Evergreen’s joint venture with Renewable Energy and Q-Cells, helped boost results as well.
Evergreen and its partners will expand EverQ’s production through 2012. They are also planning an initial public offering for the joint venture, though timing and specifics remain uncertain.
The company also announced its Devens, Mass. facility was progressing faster than expected, with management contending it will be able to deliver its first shipment of solar panels by the summer of 2008, a quarter ahead of its previous estimate.
Horwitz, who reiterated his “buy” rating, was impressed with the company’s results and was upbeat on the company’s future.
In a report to investors, he said that with the new technology, expansion roadmap, and new silicon agreements, he believes the company gives investors exposure to a “best-in-class” solar player.
In terms of the company’s share price though, Horwitz noted that the stock has been lagging compared to its high flying peers fuch as First Solar and SunPower, with many investors in a short position. With the new and improving numbers, Horwitz sees a potentially strong future.
“I think the stock has a lot of legs from here,” Horwitz said.
CIBC World Markets analyst Adam Hinckley took a more pessimistic tone. According to the Associated Press, Hinckley kept his “sector perform” or “hold” rating on the company’s stock, citing low levels of profitability, until the company’s expansions–which he finds encouraging–are completed.
Here is another story from Businessweek about the explosive investment opportunities in the solar industry.
MEMC shares jump on profits, solar deals
NEW YORK
Shares of silicon wafer maker MEMC Electronic Materials soared to a 52-week high Friday following announcements of multibillion dollar deals with solar panel companies.
On Thursday, MEMC reported third-quarter earnings of $151.5 million, or 65 cents per share, compared with $91.1 million, or 40 cents a share, in the same quarter last year.
Revenue rose 16 percent to $472.8 million from $408 million.
The company missed expectations of 80 cents a share in income on revenue of $477.5 million according to a Thomson Financial analyst poll, partly due to power outage last month at a Pasadena, Calif., factory that slowed down production.
UBS maintained its “Buy” rating and raised its share price target to $85 from $77, saying that new solar deals offset the mixed third-quarter results.
In a note to clients, UBS said MEMC signed a 10-year deal to sell $7 billion to $8 billion worth of solar wafers to Conergy, and expanded its original 10-year deal with Gintech by another $700 million, for a contract now worth $3 billion to $4 billion.
UBS estimated that MEMC still has enough polysilicon left to sign one more customer for a 10 year deal worth $2 billion to $3 billion.
Solar wafers have become one of MEMC’s fastest growing products.
MEMC also late Thursday offered a fourth-quarter revenue guidance range mostly above analyst estimates.
Shares rose $11.78, or 19.87 percent, to $71.08 Friday. Earlier, they traded as high as $72.17, topping a previous 52-week high of $68.80.
Here is an article from c/net news regarding first solar. Looks like they are going to a fourth manufacturing facility.
November 6, 2007 2:39 PM PST
Fast-growing First Solar announces deals and plants
Posted by Michael Kanellos
First Solar, those cadmium telluride oddballs, is on the move again.
The company said this week that it has signed a deal to supply Babcock & Brown with solar modules in a deal that will bring it a $1 billion in revenue between 2008 and 2009. Overall, First has contracts to install over 3 gigawatts of power through 2012.
To meet demand for the project, the company’s board has approved a fourth manufacturing plant in Malaysia. Two are under construction, and the company announced a third manufacturing plant in April. Each plant will have four manufacturing lines. When up and running, each plant will be capable of turning out 120 megawatts worth of solar panels a year, or 480 megawatts in total.
That will more than double the company’s existing capacity. Right now, the company has plants in Germany and the U.S. that cumulatively can crank out 210 megawatts worth of panels.
On Wednesday, First Solar will announce earnings for its third quarter.
Unlike silicon solar cell makers or the armies of CIGS manufacturers, First Solar extracts electricity from thin films of cadmium telluride (a semiconductor made from cadmium and tellurium) on glass. Although not as efficient as silicon cells, cadmium tellurium cells are comparatively cheap to make and fairly robust. They operate in a wide temperature range and in a variety of light conditions, including dawn and dusk. In other words, it’s the Honda Civic of solar technologies.
The company isn’t facing a material shortage, like silicon manufacturers, and it is producing product, unlike the vast majority of CIGS companies.
The fact that glass, which is heavy, was a crucial part of the equation made some people skeptical early on, but the company has been growing dramatically. In the second quarter, First Solar reported $77.2 million in revenue, up from $27.9 million for the same period the year before. Net income came to $44.4 million, compared with a loss of $2.5 million for the same quarter the year before.
It went public about a year ago at $20. It now sells for $169 a share. Financial analysts love this company.
The Walton family of the Wal-Mart fame funded the company from the beginning and still owns a large chunk of the stock.
(5.0 out of 5)
Suntech Power Opens Shop in San Francisco
California’s efforts to shore itself up as the friendliest cleantech state in the union got a boost Monday, as the Chinese photovoltaic solar-cell maker Suntech Power Holdings officially opened shop in San Francisco.
Suntech is one of the world’s largest solar-panel makers, pulling in $599 million in sales last year and a year-over-year growth rate approaching 150 percent, according to recent filings.
San Francisco Mayor Gavin Newsom said Suntech’s arrival could help establish the city as a center of a fast-growing industry that still hasn’t formed a dominant hub in the United States.
“We had a lot of folks trying to get this headquarters announcement in their city,” Newsom said Monday at a press conference, according to the San Francisco Chronicle. “For them to be in San Francisco is a big win.”
Suntech has said that a key to the company’s decision was California’s Solar Initiative, which began last January and will offer $2.9 billion in tax rebates to encourage the installation of 3,000 megawatts of solar capacity in the state over the next 10 years.
According to Suntech, California companies already make up 70 percent of the solar maker’s U.S. customer base — including such large, high-profile, San Francisco-centered projects as a 500 kW solar-power system at the airport, and a glass-on-glass solar demonstration project at the California Academy of Sciences.
Suntech previously revealed its plans to move to California to Greentech Media in September.
Chinese Solar Power Company Sees U.S. As Next Big Growth Market
October 24, 2007: 08:05 PM EST
Oct. 25, 2007 (Investor’s Business Daily delivered by Newstex) —
Germany’s belief in solar power (OTCBB:SOPW) — and strong subsidies — has made that gray-skied country the world’s largest solar market.
But Suntech Power Holdings STP sees bigger promise in the U.S.
The world’s fourth-largest solar cell maker on Tuesday opened its U.S. headquarters in San Francisco.
The U.S. was the third-largest market for solar panels last year, and some analyst think it will slip to No.4 when this year is tallied. But the Wuxi, China-based Suntech says abundant sunshine and leadership from states such as California will propel the U.S. to the top of the market within five years.
“The main thing that has to change, which will happen, is the price of the product has to come down, which means the price of silicon has to come down,” said Steve Chan, Suntech’s chief strategy officer.
The U.S. now is many megawatts shy of the lead spot.
Banking On U.S.
Suntech’s U.S. sales still are tiny. The U.S. market accounted for just 3% of its $599 million in revenue last year. Germany was tops with 42%. Suntech also sold more of its systems in China and Spain than in the U.S.
Chan said U.S. sales could account for 10% of Suntech’s 2007 sales. Globally, the U.S. lags in solar installation.
Germany accounted for 55% of the 1.7 gigawatts of new photovoltaic capacity last year, according to industry research firm Solarbuzz. Japan was second with 17%. The U.S. market absorbed 8%.
Some analysts predict heavy subsidies in Spain will vault that nation ahead of the U.S. for 2007.
But spiking oil prices are keeping U.S. and European governments interested in solar power. That means subsidies.
California leads the U.S., with an 11-year, $3.4 billion initiative to subsidize solar panels on up to a million roofs. Other states have weaker incentives. Analysts say it will take a large national incentive program to drive more U.S. demand.
But even without stronger U.S. demand, Suntech is boosting sales.
Its 2006 revenue of $599 million was up 165% from the year before. In the second quarter, sales were up 148% to $317.4 million.
Suntech has ramped up production, too, outstripping the deals its signed to supply silicon, the raw material of solar cells. That’s forced the company to buy silicon on the much more expensive spot market.
“They’ve taken the tact to worry less abut gross margins and worry more about ramping their top line,” John Hardy, an analyst with American Tech, said.
That’s pinched margins and spooked many investors.
Suntech has signed new supply agreements that should help, and more silicon should hit the market in 2008 and 2009.
The shortage of silicon has created a bottleneck for the industry. That drove up prices, which in turn, spurred more development of silicon sources.
ThinkEquity Partners analyst Budong “Peter” Peng says capacity could double by 2009, and then double again in a few more years.
“Silicon could become a commodity in next three or four years,” he said.
Meanwhile, Suntech has hedged its bets. It’s investing in flexible thin-film technology. That technology uses little or no silicon and produces flexible cells, though typically at lower efficiency rates.
Suntech also is pushing into building-integrated photovoltaics. Last year, it bought MSK, a Japanese maker of BIPV systems. BIPV incorporates energy-creating solar cells into standard building materials such as windows and roof tiles. The results are buildings that produce power, without the added costs or political statements of large solar panel arrays.
Both of those technologies are still a small part of Suntech’s business and the overall solar market.
The MSK deal came with some expensive low-margin inventory, though the company said it already has gotten through most of that.
At the same time, it is ramping up overall production.
The company ended 2005 with an annual capacity of 150 megawatts. By the end of 2006, capacity increased to 270 megawatts. It says it is on track to reach 480 megawatts by the end of this year. Suntech has exceeded its projected capacity growth in the past. A megawatt is about what it takes to power about 1,000 U.S homes.
The main push now is to make standard ground- and roof-mounted solar panels more efficient.
Suntech says next year it will deliver panels with 20% efficiency — meaning they convert 20% of the available sunlight that hits them into electricity.
The industry standard is about 16%. But San Jose-based competitor Sunpower SPWR already sells panels above the 20% efficiency mark. It says 22% is coming soon.
Chinese Manufacturing
Still, analysts say Suntech’s cells are pretty good, if not the best. But its low-cost Chinese manufacturing base gives it a leg up.
“They’re definitely becoming known, I would say, as the best modules for the money,” said Paul Clegg, analyst with Jefferies (NYSE:JEF) & Co.
Zhengrong Shi, Suntech’s chairman and chief executive, formed the company in 2001. Today, Suntech has 4,000 employees and four production sites in China. Its shares began trading on the New York Stock Exchange in 2005.
It posted 68 cents per American depositary receipt last year, up from 30 cents the year before. It reported 25 cents per ADR in the second quarter, up 47% from a year earlier.
Analysts surveyed by Thomson Financial expect $1.03 this year, and $1.62 next.
Peng says even Suntech’s competitors thinks the company is on the right track. ThinkEquity surveyed Chinese solar companies about who they thought would be the eventual solar winner in China.
“Each and every company answered ‘us and Suntech,’” Peng said.
Sunpower (SPWR) is up 32% at $127.77 since we wrote this piece. The stock has been propelled by news of expansion into the US market and rising crude oil prices. Photovoltaic solar panels continue to become more cost effective as fossil fuel prices skyrocket.
Looks like Sunpower is not the only stock that is doing will in the solar space. Check out this article from Forbes on 10/26/07 by Carl Gutierrez
Investors couldn’t seem to buy enough shares of Evergreen Solar on Friday as the company reported improving quarterly results and performance, bringing needed confidence to the value of the solar company.
Share of Evergreen lifted 15.9%, or $1.47, to close Friday at $10.70. Its shares have traded in a range of $6.97 to $13.21 over the past 52 weeks.
Evergreen (nasdaq: ESLR – news – people ), based in Marlboro, Mass. , is a manufacturer of solar power products with its proprietary, low-cost String Ribbon wafer technology.
According to Pacific Growth Equities analyst Michael Horwitz, by using less silicon, the company’s novel approach to its solar technology leaves it less vulnerable to the supply problems experience by its peers over the last few years.
The third-quarter results, which were announced after the bell closed on Thursday, posted sales of $18.2 million, beating Wall Street’s expected $17.0 million. Its loss of 4 cents per share also came ahead of Wall Street’s expect 6 cents per share.
Horwitz credited the day’s rise to emboldened investor confidence.
The solar-products company narrowed its loss in the third quarter on cost-control initiatives and said it expects to narrow its loss again in the fourth quarter on continued improvements. Profits from EverQ, Evergreen’s joint venture with Renewable Energy and Q-Cells, helped boost results as well.
Evergreen and its partners will expand EverQ’s production through 2012. They are also planning an initial public offering for the joint venture, though timing and specifics remain uncertain.
The company also announced its Devens, Mass. facility was progressing faster than expected, with management contending it will be able to deliver its first shipment of solar panels by the summer of 2008, a quarter ahead of its previous estimate.
Horwitz, who reiterated his “buy” rating, was impressed with the company’s results and was upbeat on the company’s future.
In a report to investors, he said that with the new technology, expansion roadmap, and new silicon agreements, he believes the company gives investors exposure to a “best-in-class” solar player.
In terms of the company’s share price though, Horwitz noted that the stock has been lagging compared to its high flying peers fuch as First Solar and SunPower, with many investors in a short position. With the new and improving numbers, Horwitz sees a potentially strong future.
“I think the stock has a lot of legs from here,” Horwitz said.
CIBC World Markets analyst Adam Hinckley took a more pessimistic tone. According to the Associated Press, Hinckley kept his “sector perform” or “hold” rating on the company’s stock, citing low levels of profitability, until the company’s expansions–which he finds encouraging–are completed.
Here is another story from Businessweek about the explosive investment opportunities in the solar industry.
MEMC shares jump on profits, solar deals
NEW YORK
Shares of silicon wafer maker MEMC Electronic Materials soared to a 52-week high Friday following announcements of multibillion dollar deals with solar panel companies.
On Thursday, MEMC reported third-quarter earnings of $151.5 million, or 65 cents per share, compared with $91.1 million, or 40 cents a share, in the same quarter last year.
Revenue rose 16 percent to $472.8 million from $408 million.
The company missed expectations of 80 cents a share in income on revenue of $477.5 million according to a Thomson Financial analyst poll, partly due to power outage last month at a Pasadena, Calif., factory that slowed down production.
UBS maintained its “Buy” rating and raised its share price target to $85 from $77, saying that new solar deals offset the mixed third-quarter results.
In a note to clients, UBS said MEMC signed a 10-year deal to sell $7 billion to $8 billion worth of solar wafers to Conergy, and expanded its original 10-year deal with Gintech by another $700 million, for a contract now worth $3 billion to $4 billion.
UBS estimated that MEMC still has enough polysilicon left to sign one more customer for a 10 year deal worth $2 billion to $3 billion.
Solar wafers have become one of MEMC’s fastest growing products.
MEMC also late Thursday offered a fourth-quarter revenue guidance range mostly above analyst estimates.
Shares rose $11.78, or 19.87 percent, to $71.08 Friday. Earlier, they traded as high as $72.17, topping a previous 52-week high of $68.80.
Here is an article from c/net news regarding first solar. Looks like they are going to a fourth manufacturing facility.
November 6, 2007 2:39 PM PST
Fast-growing First Solar announces deals and plants
Posted by Michael Kanellos
First Solar, those cadmium telluride oddballs, is on the move again.
The company said this week that it has signed a deal to supply Babcock & Brown with solar modules in a deal that will bring it a $1 billion in revenue between 2008 and 2009. Overall, First has contracts to install over 3 gigawatts of power through 2012.
To meet demand for the project, the company’s board has approved a fourth manufacturing plant in Malaysia. Two are under construction, and the company announced a third manufacturing plant in April. Each plant will have four manufacturing lines. When up and running, each plant will be capable of turning out 120 megawatts worth of solar panels a year, or 480 megawatts in total.
That will more than double the company’s existing capacity. Right now, the company has plants in Germany and the U.S. that cumulatively can crank out 210 megawatts worth of panels.
On Wednesday, First Solar will announce earnings for its third quarter.
Unlike silicon solar cell makers or the armies of CIGS manufacturers, First Solar extracts electricity from thin films of cadmium telluride (a semiconductor made from cadmium and tellurium) on glass. Although not as efficient as silicon cells, cadmium tellurium cells are comparatively cheap to make and fairly robust. They operate in a wide temperature range and in a variety of light conditions, including dawn and dusk. In other words, it’s the Honda Civic of solar technologies.
The company isn’t facing a material shortage, like silicon manufacturers, and it is producing product, unlike the vast majority of CIGS companies.
The fact that glass, which is heavy, was a crucial part of the equation made some people skeptical early on, but the company has been growing dramatically. In the second quarter, First Solar reported $77.2 million in revenue, up from $27.9 million for the same period the year before. Net income came to $44.4 million, compared with a loss of $2.5 million for the same quarter the year before.
It went public about a year ago at $20. It now sells for $169 a share. Financial analysts love this company.
The Walton family of the Wal-Mart fame funded the company from the beginning and still owns a large chunk of the stock.