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This article is a continuation of a previous article posted last week. In this article we present the full set of quarterlies together with a full year EPS estimate for the following solar stocks:

  • Canadian Solar Inc. (NASDAQ:CSIQ)
  • China Sunergy Co., Ltd. (NASDAQ:CSUN)
  • Daqo New Energy Corp. (NYSE:DQ)
  • Hanwha Solarone Co., Ltd. (NASDAQ:HSOL)
  • JA Solar Holdings Co., Ltd.(NASDAQ:JASO)
  • Jinko Solar Holding Company Limited (NYSE:JKS)

Please note that the tables below are based on the latest information from last week. As of Monday morning of this week, CSIQ has negatively revised guidance. They have managed to blow up Q3 from a potential loss of four cents to a loss that could exceed 40 cents. Also today, there was news from China that ASPs continue to fall. The Q3 estimates will be updated in a couple of weeks after we receive a few more guidance updates.

Quarterly and Full Year EPS Estimates for Solar Stocks

Stock

Q1

Q2

Q3 EST

Q4 EST

FY EPS Estimate

JKS

2.10

1.82

1.15

0.44

5.51

CSIQ

0.13

0.16

-0.04

0.07

0.32

CSUN

0.09

-0.42

-0.26

-0.34

-0.93

DQ

0.99

0.73

0.45

0.20

2.37

HSOL

0.22

-0.12

-0.02

-0.05

0.03

JASO

0.41

-0.22

0.11

0.05

0.35

As mentioned previously, Q3 and Q4 are not particularly promising quarters for solars. With the exception of DQ and JKS, the full year estimates for these solars are dismal.

Stock

Our Estimate

Street Estimate

%Difference

CSIQ

0.32

0.61

-47.0

CSUN

-0.93

-0.75

-23.9

DQ

2.37

2.45

-3.4

HSOL

0.03

-0.05

154.3

JASO

0.35

0.45

-23.0

JKS

5.51

4.40

25.2

If we compare to the Street, there is still a lot of room for Street downgrades.

JKS - Although the quarterly EPS numbers have steadily declined, they have not been in much danger of losing money. They still have some upside compared to the Street estimates for the full year. For 2012, even at an ASP of $1.05, they could make in excess of $9 per share. This is assuming they continue to execute as well as they have this year. Overall, the investments prospects for JKS remain very good.

CSIQ - CSIQ has been somewhat erratic over the years. This year, they have an acceptable "bad" performance. They do have room for more downgrades from the Street over the next few months. Next year looks a lot better for them - again assuming a module ASP around $1.05.

CSUN - This company is not looking promising both for 2011 and for 2012. Of course this is the company that could provide some surprises if module ASPs suddenly head north. But in that case all the solars would soar.

DQ - Although I really like DQ, I have sold my shares of DQ last week. Poly prices are falling much faster than expected and DQ is primarily a poly producer. The other problem is that the capacity ramp up to 12,000 MT will not be ready till late 2012.

HSOL - For shareholders, this company could mark time not just for this year but even for 2012 when the first two quarters may remain fairly stagnant.

JASO - Like HSOL, the prospects for JASO for both 2011 and 2012 do not appear to be encouraging. All four quarters for 2012 could be pretty uneventful and leading to similar results to 2011.

Will This Solar Rally Continue?

Right now we are in the midst of a mini bull market. Although no one really knows, this rally could end at any time.

The fundamentals do not point to the start of a real bull market. Q3 and Q4 can only be termed as poor (overall). Just looking at Q1 2012, four solars could continue to post quarterly EPS losses and two solars could post full year losses for 2012.

Also negative is the fact that spot prices continue to decline. The one positive of the declines is the fact that poly spot prices are falling faster than module spot prices.

The Q3 earnings release together with the conference calls will give us a better picture of Q4. Indications of sales and ASPs will be critical to our near term outlook.

Notes to the Tables

As we go further out from the current quarter estimates, the chance for greater variations from the actuals could increase greatly and the variations could be magnified by unexpected events. One example would be changes in the Euro versus the U.S. dollar. Using the latest information, these are our best estimates to date. We will update these numbers each quarter with new information impacting our solars.

Due to the extreme module pricing volatility, our results could vary greatly with changes in the module pricing.

Estimates may or may not be based on company guidance. We approach each quarter based on many factors including guidance, company history of sandbagging, maximum quarterly production and general supply and demand environment for solar products.

Our general approach is to start from scratch and build up the estimates. We do not start from company guided gross margin numbers and revenue or shipment numbers. We may crosscheck on those metrics. This is analogous to a chef purchasing a soup stock versus making soup stock from scratch.

Our estimates do not include one-time entries such as forex gains or losses.

For stock price forecasting, we have used a modest six times PE ratio.

Disclosure: I am long JKS, YGE.

Source: Solars' Quarterly And Full-Year 2011 Estimates: Part 2