For the latest news on U.S.- and Hong Kong-traded Chinese stocks, visit our new Bamboo Works site.
New Energy
Latest financial news about New enery in China.
Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters specialized about Chinese companies
Bottom line: New financing deals for Canadian Solar and Trina reflect the growing role of solar panel makers as power plant builders, and could provide some stability to the sector by providing a more reliable stream of new projects.
Trina, Canadian Solar get new financing
Two big new financing deals are shining a spotlight on a major shift taking place in the solar panel sector, with manufacturers increasingly moving into the field of solar farm development. The shift is seeing solar panel makers become their own best customers, buying up panels for use in solar farms that they build themselves. The latest headlines have Canadian Solar (Nasdaq: CSIQ) and Trina (NYSE: TSL) securing major new financing for such construction, in 2 deals that are both quite large but also very different in nature.
Solar panel makers have been building their own plants for several years now, though the trend has accelerated in the last year. The traditional model was for them to build solar farms using their own panels, and then sell those plants to longer-term buyers. But in an interesting twist to that story, solar panel makers may be looking to hold those farms themselves and put them into separate units, my sources say. Those units could then be spun off later into separate publicly listed companies, in a play that would look like a new energy version of traditional power utilities. Read Full Post…
Bottom line: Solar shares are likely to remain volatile over the next year, with current trends continuing that see Chinese companies open more offshore plants and stronger players steal share from weaker rivals.
Mixed signals from solar sector
After a brief rally to kick off the week on upbeat guidance from sector leader Canadian Solar (Nasdaq: CSIQ), Chinese solar stocks have quickly given back most of their gains on a more ominous signal from money-losing ReneSola (NYSE: SOL), which says its CFO has resigned after just over a year on the job.
Timing of the departure of Daniel Lee is somewhat coincidental, as it comes just a week after I met him and he detailed his strategy for keeping output stable and paying down debt. That strategy helped ReneSola to shrink its net loss to $2.3 million in the second quarter from a much larger $18 million in the first quarter. But that loss-cutting didn’t come without a price, as ReneSola’s solar module shipments also dropped by a third over that period. Read Full Post…
Bottom line: Tesla’s newly announced modest China sales and announcement of a plan for potential local production reflect the uphill road it faces in the Chinese market, which is unlikely to get much easier in the next 2 years.
Tesla still searching for China sales charge
China is fast becoming the land of promising upstart companies that failed to reach their potential, with word that former new energy superstar Tesla (Nasdaq: TSLA) has posted very ho-hum car sales in a market where it once held out big hopes. The rare China sales figures come as Tesla discussed possible plans to localize some of its manufacturing in the world’s largest auto market, a move that charismatic founder Elon Musk says could cut the cost of cars by up to a third.
The latest Tesla news came from a local media event in China that didn’t go off too smoothly, and apparently wasn’t meant to be reported by foreign media. The event’s lower-key nature and other glitches were unusual for Tesla, which was traditionally a master at slickly orchestrated events and appearances by Musk that gave the company hugely positive publicity when it first drove into China last year. Read Full Post…
Bottom line: Xiaomi’s first-ever quarter-to-quarter sales decline means it’s unlikely to meet its 2015 sales target, while Apple’s latest environmental announcement is part of a broader image-polishing campaign in China that seems to be working.
Xiaomi posts first-ever sales drop
You don’t hear sputtering smartphone maker Xiaomicomparing itself to former role model Apple(Nasdaq: AAPL) too much these days, but both companies are in the headlines today as each pursues its own different agenda. An increasingly desperate-looking Xiaomi is reportedly eyeing the US, as the former high-flyer notches its first-ever quarter-on-quarter decline in smartphone shipments. Meantime, Apple is turning up its China public relations machine with announcement of a major expansion of its environmental protection campaign in the heavily polluted country.
Xiaomi and Apple were often mentioned in the same sentence as recently as last year, when the former was one of China’s hottest companies and pegged by some to become the nation’s first global smartphone brand. During that time Xiaomi’s talkative chief Lei Jun liked to compare his company to Apple, resulting in a war of words at one point after Apple’s chief designer accused Xiaomi of being a copycat. Read Full Post…
Bottom line: YIngli’s sudden repayment of 70 percent of a maturing bond shows the government may provide partial assistance for struggling solar panel makers, in an effort to engineer an orderly shut-down of these weaker companies.
Yingli makes surprise debt repayment
The story of China’s troubled solar panel sector has taken an unexpected twist, with word of a last-minute partial reprieve for Yingli (NYSE: YGE), one of the weakest major players that looked set to default on a large debt payment. The development came quite quickly and had a few unusual elements that hint strongly at government intervention.
Yingli’s case is important because it will show to what extent Beijing and local governments may come to the rescue of ailing companies from the solar panel sector. Earlier signals had indicated Beijing was prepared to let weaker companies fail or get acquired, providing a second round of much-needed consolidation for a sector plagued by overcapacity. But this latest sign shows Beijing and especially local governments may be losing some of that resolve as China’s economy slows. Read Full Post…
Bottom line: Beijing should take a more holistic approach to developing green cars in China, which should include education of owners and creation of owner communities in addition to financial incentives and infrastructure building.
Beijing in new steps to charge up EV sales
China made the latest new move to boost its sputtering electric vehicle (EV) program over the holiday, disclosing an ambitious plan to sharply accelerate installation of charging stations across the country. The plan was aimed at countering one of the biggest obstacles to EV development, namely concerns from potential owners about difficulties they might face recharging their vehicles.
The new move comes after Beijing announced new financial incentives for EV buyers in May, and could provide some more momentum to a national program that has fallen far short of expectations. These kinds of piecemeal measures look good in theory, but often seem to fall flat due to lack of national coordination and supporting education and other publicity. Read Full Post…
Bottom line: YIngli’s debt restructuring plan and ReneSola’s early debt repurchase will bring some confidence to solar shares, but pessimism will quickly return as their situations deteriorate without major signals of new government support.
Yingli delays debt repayment
Shares of Yingli (NYSE: YGE) and ReneSola (NYSE: SOL) have taken investors on a wild ride these last few weeks, reflecting the alternating hopes and fears gripping 2 of the shakiest companies in a solar sector crippled by a downturn now entering its fourth year. If I were a betting man, I would say the chances are better than 80 percent that Yingli won’t survive the crisis, especially after the company’s latest announcement that it will miss a debt repayment deadline. Chances for ReneSola look slightly better, but even then I would only put the company’s likelihood of survival at 50-50.
One of the biggest questions fueling the uncertainty is whether Beijing and local governments will step in to rescue these companies. A year ago the answer would almost certainly have been “no”, reflecting China’s desire to clean up a bloated sector plagued with excess capacity. Recent signals show Beijing may still want to let the weakest players fail, but also that China’s slowing economy may be weakening that resolve. Read Full Post…
The following press releases and media reports about Chinese companies were carried on September 29. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════
Walmart’s (NYSE: WMT) Yihaodian Overhaul Sparks Mass Resignations (Chinese article)
Google (Nasdaq: GOOG) Leads Huawei into US Smartphone Market (Chinese article)
Didi Kuaidi Invests in Indian Car Hire App Ola (English article)
Beijing Commerce Department Opens Inquiry into Xiaomi False Claims (Chinese article)
Yahoo (Nasdaq: YHOO) Says on Track to Spin Off Alibaba (NYSE: BABA) Stake This Year (English article)
Bottom line: The bankruptcy of Tianwei signals Beijing will allow a new round of failures for weaker solar panel makers, with YIngli and ReneSola the most likely to come under pressure.
Future looks bleak for Tianwei
News that solar panel material maker Baoding Tianwei is on the brink of collapse has sent shudders through the entire sector, as everyone guesses who might be next to fall in a looming new clean-up of China’s bloated industry. Tianwei has been in trouble for a while now, after the company became the first state-run firm to ever default on a domestic bond interest payment back in April.
That development certainly didn’t bode well for Tianwei, but it remained unclear if the local government or Beijing would ultimately step in to bail out the company and save its investors. Now we finally have the answer to that question, following media reports that Tianwei and 3 of its business units are formally filing for bankruptcy. (English article; Chinese article) Read Full Post…
Bottom line: China is likely to see 1-2 of its weakest major solar panel makers close over the next year in a campaign led by Beijing, with Yingli as the most likely candidate to make the first exit.
Yingli’s star grows dimmer
A couple of new reports from the Chinese solar sector are shining a spotlight on consolidation that’s still needed before the industry can return to health. One report cites the Ministry of Industry and Information Technology (MIIT), the sector regulator, saying more such consolidation is necessary and the pace should accelerate. The second is a technical announcement from Yingli (NYSE: YGE), the weakest among China’s major panel makers, saying it has fallen out of compliance with US listing requirements due to its low stock price.
The appearance of these 2 news items on the same day is purely coincidence, even though both are related to the same phenomenon. That phenomenon saw global solar panel production explode over the last decade, as scores of new plants opened in China in response to policy directives and other incentives from Beijing. Read Full Post…
Bottom line: Chinese solar panel makers who can set up profitable offshore factories could be poised for good long-term growth, demonstrating they can survive without support from Beijing.
Jinko gets financing for Malaysia plant
Two new moves on the solar front show that leading Chinese panel makers continue to march offshore in a bid to avoid anti-dumping sanctions in the US and possibly in Europe. One move has ReneSola (NYSE: SOL), one of the most advanced in the offshore migration, announcing a new joint venture in the US. The other has JinkoSolar (NYSE: JKS) landing new financing for a panel manufacturing plant in Malaysia.
Both news items look relatively encouraging, showing the Chinese panel makers want to demonstrate they can manufacture profitably in these overseas locations without financial support from Beijing. But JinkoSolar’s announcement is also showing just how tough that transformation could be, since most of the funding for its new Malaysia plant is coming from a major Chinese policy lender. Read Full Post…
