Since long time ago, I had a chat with Ken, who told me some Japanese companies are strong in producing high efficiency solar cell. I was quite bullish about that industry but didn't know how to go further. However, from the beginning of last year, there were many Chinese Solar companies IPO in NYSE, and the noise for them was louder and louder. Well, as Paul always mentioned, you can be bullish, but you cannot trust them fully. I saw LDK tumbled 30% in one day by some auditing rumors, and it got to be very brave to put money on them.
 
I trusted some of them, and I started to compare them by reading news and reports from them. One gained me more trust is the Deloitte Technology Report. The report I received in Oct, and that highlighted some companies I have already shortlisted.
 
As mentioned last time, low cost and low environmental control on producing solar cell and silicon wafers are the reasons why China becomes the world solar factory. Even Applied Materials (AMAT), MEMC Electronic MTRL (WFR) pushing harder on wafer production; First Solar Inc. (FSLR), Sunpower corporation (SPWR) earning more on solar cell production, they have their long established business model which cannot be easily altered to adapt their Chinese counterparts. Of course, another famous name is Evergreen Solar Inc. (ELSR), even their 2nd or 3rd generation solar cell have much higher efficiency without relying on more and more expensive silicon, the high cost of R&D is foreseeable.
 
After kicking out all US companies which some of them gave nearly 800% return like FSLR (partially due to high oil price). I scrutinized the known Chinese Solar companies according to their news, price and business.
 
Canadian Solar Inc. (CSIQ)
They have secured long term silicon contract from LDK and Deutsche Solar. They are Canadian company but having business in China, Solar cells modules bought from JASO, CSUN etc... seems many dependencies on other companies even is ranked 17 in the report.
 
China Sunergy Co. (CSUN)
I personally don't like China Sunergy the most as there is high risk for them not to be able to secure enough silicon wafers for even this year's order.
 
JA Solar Holdings (JASO)
Wafer is mainly from ReneSola, and no expansion news for the moment, similar to SOLF.
 
LDK Solar Co. (LDK)
Major silicon wafer producer in China, targeting to produce 6GW polysilicon from 2009-2018, after the rumor about their inventory is far less than their report has been cleared in Dec07, they look very strong and having a high possibility of explosive growth in coming years.
 
Solarfun Power Holding (SOLF)
Wafer is bought from LDK and they are targeting to increase their capacity to 360MW in mid2008.
 
Suntech Power Holding (STP)
Company secured a long term silicon contract from HOKU, ReneSola, Asia Silicon, Nitol Solar (Russia) etc. and have a long term partnership with Korea to provider them Solar Cell product. A company with strong business position which is ranked at 18 in the report.
 
Trina Solar LTD (TSL)
As ranked top in the report, Trina Solar is very aggressive on expanding, not only secured enough polysilicon from Nitol Solar in the near term, they have bought silicon furnaces from GT Solar and in Jiangsu Province, they will invest 1B for multi-phased polysilicon production facility. Even it may miss half of penny on their earning report; their long term growth provides them steam to grow in many years.
 
Yingli Green Energy (YGE)
Ranked 9 in the report, Yingli has bought furnace from GT Solar and their targeted production capacities are 200MW, 400MW and 600MW in 2007, 2008 and 2009 respectively. They produce wafer, solar cells and solar module. Most important is many people do not believe their stock price has yet reflected their earning ability.
 
It is not so easy to pick, but LDK, STP, TSL and YGE look more reasonable compare with other companies. As there is dirt and lies as Paul once suggested, it would take more time to know who are more honest... As ReneSola from China is also going to IPO as NYSE:SOL that would be quite interesting to see how many of those companies would be the ultimate leaders of the industry. The good thing is Solar Power should eventually be highly adopted worldwide. One suggested that Solar Power would account for 50% of total electricity generated by 2070, which should be hastened by high oil price.
 
Eric