| Trina Solar Falls on Crumbling Malaysian Partnership Buzz - Analyst Blog | |
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Chinese solar panel maker Trina Solar Limited TSL announced that its partnership plans with a Malaysian original equipment manufacturer (“OEM”) are on track. The confirmation came soon after several reports cropped up in the Malaysian and U.K. press about Malaysia’s Sustainable Energy Development Authority COO Datu Dr Ali Askar Sher Mohamad turning down an application from Trina Solar to make photovoltaic or PV cells in the country. The reports claimed that Malaysia has taken steps to prevent the country from being turned into a “transshipment hub”.
Trina Solar ADRs slumped over 10% earlier yesterday following the reports finally to settle down at a loss of 5.66% in late afternoon trading.
Trina Solar’s head of investor relations Yvonne Young, however, stated that the company’s current operations in Malaysia involve a cooperative pact with a local OEM partner, wherein the company supplies the components that are assembled into a solar panel. This business model was legally registered and is in compliance with local laws and regulations.
The partnership involves the development of 500 megawatt (“MW”) of solar module capacity in Malaysia. Additionally, its 400-MW solar module production target for 2015 as a part of the agreement with the Malaysian OEM remains unchanged.
Trina Solar pointed out that its OEM collaboration in Malaysia is part of its geographical diversification strategy and in line with its asset-light strategy to localize production in key markets.
In May, the company announced plans to invest $160 million for building a solar cell and module assembly facility in Rayong, Thailand. The Thai plant will have an initial solar cell nameplate capacity of 700 MW and module assemble capacity of 500 MW. Production from the plant is expected to commence in late 2015 or early 2016.
Like other Chinese companies, Trina Solar is targeting Southeast Asian countries for manufacturing capacity expansion due to their low labor costs and proximity to China. This is also an effort to dodge harsh trade barriers limiting exports to both the U.S. and the European Union. JinkoSolar Holding Co., Ltd. JKS has set up a manufacturing facility in Malaysia, which commenced production of solar cells and modules in May this year.
In spite of trade conflicts, the Chinese solar companies are cracking domestic and international deals and entering into partnerships to enhance market penetration. Yingli Green Energy Holding Co. Ltd. YGE has lately clinched a number of these orders.
Trina Solar currently has a Zacks Rank #3 (Hold). Investors may consider SolarCity Corporation SCTY, a better-ranked stock in the same space, carrying a Zacks Rank #2 (Buy).
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Trina Solar Ltd.
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CODE : TSL |
ISIN : US89628E1047 |
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ProfileMarket IndicatorsVALUE : Projects & res.Press releasesAnnual reportRISK : Asset profileContact Cpy |
Trina Solar is based in China. Trina Solar is listed in United States of America. Its market capitalisation is US$ 3.0 billions as of today (€ 2.8 billions). Its stock quote reached its highest recent level on April 22, 2016 at US$ 9.99, and its lowest recent point on January 16, 2018 at US$ 0.01. Trina Solar has 449 180 000 shares outstanding. |