ReneSola Ltd (SOL)

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ReneSola’s Cautious 2014 Outlook Drags China Solar Shares Down

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By Shuli Ren

China solar shares are broadly down after ReneSola (SOL) wrote down $203 million on one of its solar factories. Yingli Green Energy (YGE) fell 6.5%, JA Solar (JASO) lost 4.9%, Trina Solar (TSL) lost 5.2% at the time of the publication.

This is because ReneSola’s management sounded a more cautious tone than its peers, setting investors to question the peers’ 2014 demand assumptions. Roth Capital Partners reports:

Management sees the 8GW DG target set by Chinese officials driving potential risk to overall demand, and as a result, sees 2014 demand potentially decreasing vs. 2013. We forecast ~10GW of demand from China, and have been more conservative vs. other market forecasts that have placed China demand in the 12-14GW range during 2014.

SOL appears more cautious on projects vs. peers and has chosen to focus on its OEM module strategy instead. SOL has largely deemphasized building out a project pipeline. SOL continues to partner with global manufacturers in Europe and Asia to add outsourced module production capacity.