Just this week we saw two Chinese Solar companies, Trina Solar (NYSE:TSL) and Solarfun Power (SOLF) IPO on the NYSE and the Nasdaq, respectively. This follows the IPO of Canadian Solar Inc. (NASDAQ:CSIQ), which is really a Chinese company. Another Chinese Solar company, Yingli Solar, plans to list on the Nasdaq and has hired Goldman Sachs and UBS to handle its offering.
The Chinese solar market is very small and majority of these companies are taking advantage of their low cost manufacturing to sell their products to Europe and North America. The generous tax breaks in Europe and the incentives by some states in United States has led to a solar boom as the main obstacle to growth for a lot of these companies is securing enough polysilicon to boost production.
I personally would stay away from all of these stocks except for Suntech Power. I already own Suntech Power and consider it the best of breed. They are the largest in China and one of the largest in the world.
So, how have all these IPO’s performed so far (IPOHome):
Suntech Power: Up 119.8% since its IPO on 12/14/2005
Canadian Solar: Down 34.1% since its IPO on 11/9/2006
Trina Solar: Up 2.2% since its IPO on 12/19/2006
Solarfun Power (SOLF): Down 20.3% on its opening day (yesterday)
Full Disclosure: I am long Suntech Power