Auriga Says Solarfun Power (NASDAQ:SOLF) Valuation Too Low

Saying the perception that Solarfun Power (NASDAQ:SOLF) is the weakest of Chinese solar companies shipping in volume, Auriga says that doesn't justify the current valuation of the company.

Auriga said, "While SOLF continues to be perceived as the weakest in the group of Chinese players shipping in volume, we do not believe this justifies its current valuation near tangible book. Well established sales channels and the recent backing by Hanwha (880.kr, NR) increase the probability of continued share gain at the expense of Western solar; in addition, an improving cost structure offsets any disastrous ASP declines that might occur. Our $16 target is 8x our 2012 EPS estimate of $1.93, up from our prior 2011 EPS estimate of $1.75."

Auriga maintains a "Buy" rating on Solarfun Power, which closed Tuesday at $9.14, gaining $0.06, or 0.66 percent. Auriga raised their price target on them from $14 to $16.