Suntech (NYSE:STP), Hanwha SolarOne (NASDAQ:HSOL), First Solar (NASDAQ:FSLR) Yingli Green Energy (NYSE:YGE) will be among those solar companies struggling because of the eroding margins in solar modules, according to Maxim Group’s Aaron Chew.
Chew wrote in a note to clients, “Module maker margins remain firmly 20 percent, with cell/wafer makers struggling to break even.”
The third quarter average selling prices will drop to $1.25 to $1.30 [per watt], on average, even as polysilicon costs remain at around $50 to $55, he wrotes. Suntech Power Holdings (STP), and other solar company margins could drop as low as 10 percent to 12 percent, said Chew.
Even so, according to PVinsights.com, the price of silicon-based solar modules of has already dropped to $1.18 per watt, on average.
Chew has a "Sell" rating on Suntech and First Solar, and a "Hold" rating on Yingli Green Energy (YGE). He maintains a "Buy" rating on Trina Solar and STR Holdings.
Solar producers with higher costs will be the companies with the most risk, added Chew. He sees JinkoSolar (NYSE:JKS), Trina and Yingli as having valuations which should provide the companies with some protection from further share price erosion.
Wednesday, August 31, 2011
Suntech (STP) (HSOL) (FSLR) (YGE) Margins Under Pressure
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First Solar
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