Auriga Maintains a 'Buy' on Trina Solar (TSL); Trying To Add Things Up
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Price: $6.21 +14.79%
Rating Summary:
7 Buy, 14 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
7 Buy, 14 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Auriga maintains a 'Buy' on Trina Solar (NYSE: TSL) price target lowered by $1 to $8.00.
Analyst, Hari Chandra, said, "The import tariffs imposed on Chinese solar goods (with 90-day retroactivity) of 4.73% countervailing duties (CVD) and 31.14% anti-dumping duties (AD) for Trina Solar had an immediate impact on 1Q12: A $0.07 cost/Wp drag, a 7.5% GM hit, and a $0.37 hit to EPS. Also, with industry-wide policy shifts and excess capacity, TSL's module ASP ($0.92 in 1Q12 vs. $1.01 in 4Q11) will likely exit 2012 at ~$0.75/Wp. Its efforts with improved products (higher CE Honey/Honey Ultra module; TrinaSmart - panel level O&M, 3Q12 launch; and Trinamount - cost savings on mounting) are interesting but will not likely result in a measurable ASP premium. While 1Q12 cost gains at $0.14/Wp are acceptable on the silicon side (by $0.08/Wp) given a polysilicon price drop to $25/kg in 1Q12 and renegotiations, we are a leery of the $0.06/Wp "gain" on the non-silicon side. Trina Solar is already tracking $0.02 below its 2012 non-silicon cost goals in 90 days from improved supply chain costs, mfg. processes and higher CE, and now expects non-silicon cost at $0.50/Wp exiting 2012."
"Something does not add up; even with cost gains, we reckon Trina Solar (along with other c-Si players) is unlikely to turn a profit before 2014 given AD/CVD drag and continued ASP erosion. With survival economics at play in solar PV, we value TSL at 0.6x 2013 TBV for an $8PT.
For an analyst ratings summary and ratings history on Trina Solar click here. For more ratings news on Trina Solar click here.
Shares of Trina Solar closed at $5.55 yesterday.
Analyst, Hari Chandra, said, "The import tariffs imposed on Chinese solar goods (with 90-day retroactivity) of 4.73% countervailing duties (CVD) and 31.14% anti-dumping duties (AD) for Trina Solar had an immediate impact on 1Q12: A $0.07 cost/Wp drag, a 7.5% GM hit, and a $0.37 hit to EPS. Also, with industry-wide policy shifts and excess capacity, TSL's module ASP ($0.92 in 1Q12 vs. $1.01 in 4Q11) will likely exit 2012 at ~$0.75/Wp. Its efforts with improved products (higher CE Honey/Honey Ultra module; TrinaSmart - panel level O&M, 3Q12 launch; and Trinamount - cost savings on mounting) are interesting but will not likely result in a measurable ASP premium. While 1Q12 cost gains at $0.14/Wp are acceptable on the silicon side (by $0.08/Wp) given a polysilicon price drop to $25/kg in 1Q12 and renegotiations, we are a leery of the $0.06/Wp "gain" on the non-silicon side. Trina Solar is already tracking $0.02 below its 2012 non-silicon cost goals in 90 days from improved supply chain costs, mfg. processes and higher CE, and now expects non-silicon cost at $0.50/Wp exiting 2012."
"Something does not add up; even with cost gains, we reckon Trina Solar (along with other c-Si players) is unlikely to turn a profit before 2014 given AD/CVD drag and continued ASP erosion. With survival economics at play in solar PV, we value TSL at 0.6x 2013 TBV for an $8PT.
For an analyst ratings summary and ratings history on Trina Solar click here. For more ratings news on Trina Solar click here.
Shares of Trina Solar closed at $5.55 yesterday.
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