Solar Stocks Weekly Report - Week ending January 19, 2007
Mixed week for solar stocks as Crude Oil drops another 2.42%.
Hoku Scientific (Nasdaq: HOKU) was the big winner this week as the stock closed the week up a jaw dropping 85.33%. The stock more than doubled this week before dropping about 20% on Friday. The company which has a market cap of $91.52 million announced a polysilicon supply contract with Sanyo Electronics. The contract, valued at $370 million, calls for Hoku to provide polysilicon to Sanyo Electronics over a seven year period starting in January 2009. The contract also provides for an initial direct deposit of $2 million to Hoku upon signing and requires that SANYO place approximately 30% of the total purchase amount in an escrow account with Bank of Hawaii. Hoku now plans to build a plant capable of producing 2,000 metric tons of polysilicon per year. The construction costs will be around $260 million. Also, each party will have the right to terminate the contract if Hoku fails to raise enough capital for building the plant. Polysilicon is in very short supply right now and the high rates still haven’t stabilized. Polysilicon shortage has been blamed for the lack of growth in the overall solar industry but more supply is expected to come on board in the next few years. You just need to look at MEMC Electronics (NYSE: WFR) to see how the high prices of polysilicon has helped its stock.
As if the recent Chinese Solar glut wasn’t enough we are about to see another Chinese Solar IPO. JA Solar Holdings Co. has filed to sell 15M ADSs in IPO, priced between $12.50 to $14.50 each. I will have to look into this company before I comment on it.
Merrill Lynch initiated coverage on Sunpower Corp. (Nasdaq: SPWR) with a ‘buy’ rating and a $52 price target.
MEMC Electronics (NYSE: WFR) failed to build upon last week’s surge. Will it hit $50 this time is the question or will it go back to high 30’s.
I covered my short position in First Solar Inc. (FSLR) during the week.
* I am long STP and ESLR. There is a good possibility that in I will either go long or short on the stocks listed in this article.
- Hoku up huge on Polysilicon deal with Suntech Power
- Solar Energy Stocks Weekly Report - Week ending February 02, 2007
- Metallurgical grade silicon an alternative to Polysilicon?
- Got burned shorting First Solar
- Solar Stock Week-over-Week Price change vis-a-vis Oil Price - Week Ending November 12, 2006
Leave a Reply