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ReneSola Shows Stability on Fundamentals - Analyst Blog

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On May 8, 2014, we issued an updated research report on ReneSola Ltd. ( SOL ). In its short operating history, this China-based solar company has constantly fine-tuned, diversified and enlarged its product mix. The company has proved to be well adept at adjusting to changing market dynamics.

This photovoltaic manufacturer reported its first quarterly profit in the fourth quarter of 2013 following 10 quarters of reporting in the red. The swing to profit was backed by record solar module shipments.

After two years of punishing downturn, solar panel prices have increased in recent quarters, enabling major solar product manufacturers to return to profitability. Last year, ReneSola's total solar wafer and module shipments jumped 42.4% to 3,146.5 megawatt. The company continued to grow its module business while focusing more on the geographic diversification of its sales.

ReneSola is gradually expanding its portfolio internationally to capitalize on the hot solar markets worldwide, particularly on the back of a growing awareness about the benefits of green energy. We appreciate the company's efforts towards maintaining its strong foothold in the U.S. while expanding its operations in the European, Asian, African and Middle-East territories. Recently, ReneSola provided 45,900 units of solar modules to an Italian company, Tozzi Sud S.p.A. ("Tozzi Sud").

Japan would soon turn out to be ReneSola's third largest market following Europe and the U.S. It expects higher revenues, shipments as well as margins from Japan for 2014. Recently, ReneSola and a Japanese trading company - Vitec Co., Ltd. - started manufacturing Virtus II modules in Japan through a joint venture. This will enable both these companies to meet government requirements for local manufacturing.

ReneSola is also focused on cost reductions through reducing its module and wafer processing costs. The company in this respect has taken prudent steps like the use of upgraded furnaces and sourcing lower-priced raw materials.

ReneSola currently has a Zacks Rank #2 (Buy). Other well-placed stocks in the same industry include JA Solar Holdings Co., Ltd. ( JASO ), Trina Solar Ltd. ( TSL ) and Enphase Energy, Inc. ( ENPH ). While JA Solar and Trina Solar sport a Zacks Rank #1 (Strong Buy), Enphase Energy holds a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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