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Solar Trade Deal is a False Hope; Time to Cash in Some Gains

February 14, 2012 11:09 AM EST
YGE Hot Sheet
Rating Summary:
    6 Buy, 16 Hold, 2 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 2 | Down: 1 | New: 5
Auriga on Solar Power/CleanTech: Solar PC: Jinping with Joy? U.S.-China Solar Trade Deal is a False Hope; Time to Cash in Some Gains

Auriga analyst said, "Hopes of a resolution of U.S.-China solar trade standoff during Chinese Vice President Xi Jinping's U.S. visit are misplaced ."There are some bored foreigners, with full stomachs, who have nothing better to do than point fingers...China doesn't come and cause you headaches" - Xi Jinping on an overseas tour in 2009."I will not stand by when our competitors don't play by the rules...It's not fair when foreign manufacturers have a leg up on ours only because they're heavily subsidized" - President Barack Obama, SOTU speech on 1/24/12. 2011 U.S. trade deficit with China was at $295.5B - largest ever for a country, and 53% of total deficit of $558B. Since 2009, U.S. has imposed import tariffs on nearly two dozen Chinese products and lodged WTO complaints on solar panels among others. In return, China imposed some import tariffs and lodged WTO counter-complaints. With Xi Jinping's (slated to be China's President in March 2013) world view, and President Obama's political stand (amidst huge trade deficit, high unemployment, weak economy) in an election year, there is no love lost on trade issues between U.S. and China. Jinping will likely use his 2/14/12 meeting with Obama to establish a healthy rapport at best."

BOTTOM LINE: We expect NO deliverables on trade issues, specifically on imports of Chinese solar cell/modules

This morning, Auriga downgraded Yingli Green Energy (NYSE: YGE), Trina Solar (NYSE: TSL) from Buy to Hold. Auriga downgraded JinkoSolar (NYSE: JKS) from Hold to Sell.


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