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For most long term investors, it is important to have a road map of where stock prices might be headed over a 12 month period. Share price forecasts provide an important road map. For me, this is one of the most important criteria for buying and selling a stock.

This post will provide our stock price forecasts for the eleven Chinese solars discussed in our full year EPS estimates article. The share price estimates are 12 month forecasts based on our most likely earnings estimates for 2011. These forecasts will be updated from time to time on our solar research website. As we are now in the midst of the Q2 earnings season for the solar stocks, there will be another update in about a month from now.

The eleven solars discussed in this article are listed below:

  • Canadian Solar Inc. (CSIQ)
  • China Sunergy Co., Ltd. (CSUN)
  • Daqo New Energy Corp. (DQ)
  • Hanwha Solarone Co., Ltd. (HSOL)
  • JA Solar Holdings Co., Ltd.(JASO)
  • Jinko Solar Holding Company Limited (JKS)
  • LDK Solar Co. Inc. (LDK)
  • Renesola LTD (SOL)
  • Suntech Power Holdings Co., Ltd. (STP)
  • Trina Solar Limited (TSL)
  • Yingli Green Energy Holding Co. Ltd. (YGE)

The table below is based on using a fairly low six times p/e ratio. For reference, the last column provides the Street target prices. The actual performance of each stock will be based on a variety of factors such as capacity expansion, ASPs, perceived eps growth, overall market trends and a host of other metrics.

Some of The Big Winners Based on Our Share Price Estimates

JKS – A few years ago, TSL was a major star among solars rising from about $6 to about $40 (pre-split) in a relatively short period of time. We believe that JKS could be a similar star, rising from $17 to about $58. This stock is the clear leader in terms of potential gains over the next twelve months. An interesting positive is that there is a huge short position for both JKS and LDK (over 20%). This could help propel both stocks should the shorts decide to cash out on profits. JKS should enjoy a healthy 48% increase in 2011 EPS over 2010 EPS.

LDK – This stock is potentially the second biggest winner. Like STP, they have excellent political connections but unlike STP, they also have excellent metrics. By the end of this year, they should be the lowest cost module provider of all the companies listed in this article. JKS is fully integrated from wafers to modules but eventually, LDK will be an end to end producer from poly to modules. This means they will capture profits from every vertical in the value chain. By the end of 2011 or sometime in 2012, LDK should be considered the premier solar company in China.

DQ – Although our research shows great potential gains for this company, we approach DQ with some caution as they are highly dependent on the spot price of polysilicon. For 2012, huge capacity should be coming on-stream. As well, we believe that based on processing costs, the current $53 per kilogram spot price should fall to about $35 per kilogram.

Some of the Big Losers Based on Our Share Price Estimates

CSUN – This stock is headed for a loss for 2011. The stock is already pretty depressed but we do feel, they are still vulnerable to additional downside pricing movements. They could post a 137% decline of 2011 EPS over 2010 EPS.

STP – This is a frustrating stock. It just can’t get out of the gate for the horse race. The overall company strategy of cells and modules was a terrible idea. Although they are adding wafers, they remain a slow plodding giant. STP could suffer a 34% decline in 2011 EPS over 2010 EPS.

SOL – We like this company but over and over, they manage to disappoint. For us they have failed to capitalize on fully integrating production. Instead they have stubbornly clung to the believe that they can remain a primarily wafer producer. It appears that they will sustain losses in Q3 and possibly Q4. This is not good for stock prices. SOL could suffer a 73% decline in 2011 EPS over 2010 EPS.

The Street target prices and the current stock prices are based on data from Yahoo as of August 16 2011.

12 Month Stock Price Targets For the Eleven Chinese Solars

2011 EPS

Current

12 Month

Potential

Street

Estimate

Stock Price

Target Price

% Gain

Target Price

CSIQ

1.14

7.87

6.81

-13

9.47

CSUN

-0.46

1.38

-2.78

-301

1.53

DQ

2.90

6.23

17.40

179

15.13

HSOL

1.00

4.57

5.99

31

7.03

JASO

0.80

4.06

4.83

19

6.02

JKS

9.77

17.25

58.63

240

29.33

LDK

2.79

6.81

16.73

146

9.56

SOL

0.52

3.58

3.14

-12

4.56

STP

0.71

6.58

4.25

-35

8.07

TSL

2.67

15.28

16.05

5

28.58

YGE

1.52

6.27

9.12

45

9.89

Disclosure: I am long JKS, LDK, DQ.

Source: The Big Solar Winners and Losers for 2011