Trina Solar Limited
) dropped about 6% on Monday, April 14, as the company lowered
its projection for solar module shipments for the first quarter
of 2014. The lower expectation stemmed from hitches in shipments
to the European Union.
Trina Solar now expects to ship 540-570 megawatts (MW) worth of
panels in the first quarter, which is down sharply from its
previous forecast of 670-700 MW. The revised guidance includes
20-30 MW of panels shipped for its downstream projects.
Nevertheless, the reduced expectation is temporary and Trina
Solar expects shipments to European markets to increase as
settlements between the countries are finalized. Again, demand in
some European countries also remains strong for Trina Solar to
capitalize on. The company also reaffirmed its full year 2014
shipment expectation of 3.6 gigawatt (GW) GW to 3.8 GW.
Even though Trina Solar cut its shipment expectation for the
first quarter, it raised the gross margin guidance to a range of
18% to 20%, from the mid-teens expectation earlier. The improved
outlook is backed by better module average sales prices and a
higher gross margin from the sale of a 50 MW project in Wuwei,
Another panel maker,
Yingli Green Energy Holding Co. Ltd.
) shares were also down 6.5% on Friday, April 11, after it warned
of lower-than-expected shipments due to soft seasonal demand in
China and a project delay in Algeria. In a ripple effect, shares
Canadian Solar Inc.
) were hit by 4.3% and 6.3% yesterday, respectively.
The solar market boomed in China in 2013, overtaking longtime
leader Germany. One of the world's largest solar power companies,
Canadian Solar, swung into profit in 2013 as against the loss
incurred in 2012, buoyed by an increase in shipment volume and
Despite the lukewarm solar module shipment forecasts for the
first quarter, alternative energy is the most happening thing in
the energy sector now in the wake of widespread concerns over
carbon emission, climate change and other pressing environmental
With rapid uptake of renewable energy and growing awareness
regarding its benefits, the utility providers are gradually
shifting their mode of power generation to solar, wind and water
from traditional methods. This bodes well for solar companies,
which are continuously diversifying their customer base
geographically, across the North American and European markets,
as well as the emerging markets of South Korea, Japan and China.
On a more heartening note,
JA Solar Holdings Co.
) shares were up 7.8% yesterday on its first-quarter shipment
announcement. It now expects first-quarter shipments to exceed
620 MW, above the high end of its prior guidance of 580 MW to 610
MW. JA Solar reiterated its full-year shipment target of 2.7 GW
to 2.9 GW.
Though Trina Solar and Yingli have cut their first quarter
shipment outlook, rising Asian demand, China in particular, has
helped the industry's main players (including Trina Solar) to
maintain steady margins. China reportedly increased the 2014
target for new solar PV capacity installations to 14 GW from its
previous forecast of 12 GW. If that's so, the country is expected
to account for a sizeable share of Trina Solar's total shipments
Trina Solar carries a Zacks Rank #2 (Buy). Some better-ranked
stocks in the same industry include Canadian Solar and ReneSola,
both sporting a Zacks Rank #1 (Strong Buy).
CANADIAN SOLAR (CSIQ): Free Stock Analysis
JA SOLAR HOLDGS (JASO): Free Stock Analysis
RENESOLA LT-ADR (SOL): Free Stock Analysis
TRINA SOLAR LTD (TSL): Free Stock Analysis
YINGLI GREEN EN (YGE): Free Stock Analysis
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