Add a New Bears Reason

Company: Suntech Power Holdings (STP)
Current price:
Headline: (100 character max)
Analysis:
Cancel
0%
agree
2 votes

  Suntech Power faces stiff competition from solar companies and conventional energy companies

Suntech Power faces stiff competition from the photovoltaic divisions of large conglomerates such as Sharp Corporation's $2.6 billion joint venture with Italy’s Enel SpA (EN), Kyocera Corporation (KYO), and SunPower Corporation (SPWRA). Many of Suntech's competitors have become vertically integrated--from silicon wafer manufacturing to photovoltaic integration--gaining precious market share. Suntech also faces competition from smaller competitors such as First Solar (FSLR), which is producing thin film solar modules, amorphous silicon, and string ribbon. These advanced technologies may prove to be more efficient in generating energy than Suntech's crystalline polysilicon technology.

Finally, all of the competitors in the solar market face competition from non-renewable energy companies, such as coal, natural gas, and oil producers. Since the price of crude oil has plummeted from its peak of about $147 in July 2008, solar technology has become less economically viable in the short term. High photovoltaic manufacturing costs and the low price of crude oil, coal, and natural gas all make solar companies dependent on government support and less economically attractive in the short term.

(100 character max) Cancel
25%
agree
4 votes

  STP in trouble due to the weaker euro

Suntech Power is going through a difficult period due to a weaker Euro, low oil prices and a sector that has become very crowded. It is hard to believe that this $8.54 stock is the same one in which we took partial profits in late 2007 at $65.17 for a gain of 151.33%. The company recently lowered its guidance for the fourth quarter of 2008 as well as full year 2009 and was hit by six analyst downgrades. It is really hard to see the bright side of solar at this point if you expect oil to stay at or below these levels and the strength in the US dollar to continue. However declining polysilicon prices, increasing efficiency of solar panels and expected green initiatives by the Obama administration should bode well for solar long-term and I am going to retain our position in Suntech especially since I do not believe oil is going to stay around $50 per barrel for very long.

(100 character max) Cancel
33%
agree
6 votes

  PV equipment is becoming more expensive

With silicon prices skyrocketing due to a silicon shortage, PV equipment is becoming more expensive, making it less cost-effective than other forms of energy like coal.

(100 character max) Cancel
37%
agree
8 votes

  Low margins due to price competition

The fact that conversion efficiency is the only thing that distinguishes one line of PV equipment from another coupled with the insignificance of the differences between the efficiencies of current product lines means that firms will compete based on prices, leading to lower profits.

(100 character max) Cancel
25%
agree
4 votes

  Must work to attract and keep customers

Because Suntech has only achieved its major growth in the past year, it must continue to work to attract customers and keep them in the future, a process that could incur heavy costs.

(100 character max) Cancel
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki