Part I: Chinese Solar IPOs in the U.S.

Since I am researching the wave of Chinese Solar IPO’s on U.S. exchanges, I am going to be sharing some of my acquired knowledge. Here are the five Chinese Solar companies that have gone public in the United States (four in the past 5 months). In addition, below are the three additional Solar companies that are expecting an IPO on the NASDAQ this year. The Chinese solar industry is exploding and some of these companies are great investments. Below, I give a brief overview of the companies. My paper is about (1) why these companies are choosing to do their IPO in the U.S. markets over mainland China, Hong Kong, or the U.K.; (2) regulatory implications for the Suntech PowerUnited States regarding Sarbanes-Oxley and future foreign IPOs; (3) the growth of the Chinese domestic solar market; (4) prospects for U.S. venture in Chinese solar/renewable energy companies; and (5) potential for cooperation between China and the United States in solar to establish energy security and address the growing problems of global warming.

1. Suntech Power (STP): NYSE IPO on December 14, 2005. The company trades on NYSE with led the waves of IPOs. With a market cap of over $5 billion, healthy revenues and profits recently posted for 2006, and ambitious goals for growth, Suntech is the largest and the best investment of the bunch. Suntech was offered at $15.00 and is now being traded at $34.610.

Trina Solar

Suntech Power2. Trina Solar (TSL): NYSE IPO on December 19, 2006. Trina has the second largest market cap at $845 million and is the only other IPO on NYSE. With triple digit earnings and close ties with the Chinese government, this is the second best of the crop in my opinion. The IPO price was $18.50 and is now being traded at around $40.

3. JA Solar (JASO): NASDAQ IPO on February 7, 2007. Currenlty trading at $16.770 with an IPO price that was $15. Specializing in solar cell production, JA hopes to have 175 MW annual capacity by 3rd quarter this year.

4. Solarfun Power (SOLF): NASDAQ IPO on December 20, 2006. 4th quarter profits more than tripled and expects continue “robust” growth in 2007. The stock is currently trading pretty close to its IPO price ($12.50) at $12.195.

5. Canadian Solar (CSIQ): NASDAQ IPO on November 9, 2006. Posted a 4th quarter loss of $5.2 million and expects these trends to continue for the first half of 2007 so this might not be the best time to invest here. A Canadian incorporated company, but all manufacturing and management is in China.

Expected IPOs 2007:

Integrated PV System1. Yingli Solar – Tianwei Yingli New Energy Resources: Goal to raise $500 million in second quarter IPO handled by UBS and Goldman Sachs. Yingli is a vertically integrated solar power company involved in every step of the process. Annual production capacity is currently 100 MW with a target of 600 MW by 2010.

2. LDK Solar Hi-Tech: Aims to raise $400 million IPO arranged by UBS and Morgan Stanley in third quarter. LDK specializes in solar wafers and curenlty has an annual production capacity of 200 MW. LDK hopes to increase capacity to 1,000 MW by 2010.

3. CEEG (Nanjing) PV-Tech: Expected $200 million IPO in May, hired Merrill Lynch and Lehman Brothers. CEEG specializes in solar cell production and currently has an annual production capacity of 192 MW with expectations of over 600 MW by 2008.

The solar industry promises to get crowded. In many respects, the forthcoming IPOs are stronger plays than many of the existing Chinese Solar Energy stocks.


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