Suntech Power Holdings Company Ltd. (STP) will develop a 10MW solar plant in Chek Kang village in the Sangri County, Shannan Prefecture, Tibet.
The solar power plant will be one of the highest on earth at around 4,000 meters above sea level. With targeted completion by the middle of the 2011, the facility will generate around 20,000 MWh of renewable electricity per year to help facilitate sustainable economic development in Tibet.
Suntech has been active in rural electrification projects in Tibet. Over the last few years, Suntech has donated more than fifty independent solar systems for schools, community centers and houses throughout the region. In 2008, Suntech installed a solar system at the Mt. Everest base camp to provide trekkers with clean and reliable access to power.
Wuxi, China-based Suntech is a leading solar energy company. The company designs, develops, manufactures and markets photovoltaic (PV) cells and modules.
Looking forward in the first quarter of 2011, Suntech expects PV shipments to be relatively flat compared with the fourth quarter of 2010. Gross margin in the first quarter of 2011 is expected to be approximately 20%.
For fiscal 2011, Suntech expects to ship at least 2.2GW of solar products and generate revenues of $3.4 billion to $3.6 billion. Gross margin for fiscal 2011 is expected to be approximately 20% to 22%.
Suntech Power is one of the largest producers of PV solar modules under its proprietary Pluto technology with a geographically-diversified customer base. The company by the end of 2011 expects to achieve an annualized production capacity of 2.4GW for cell and module; and 1.2GW for wafer. Full year 2011 capital expenditure is expected to be in the range of $250 million–$270 million.
Other positive factors for Suntech include ongoing expansion programs, higher conversion efficiency through its Pluto technology-enabled modules, subsidy program in China and improving operating efficiencies. However apprehensions over rising competition, subsidy cuts in Europe and financial stability of its customers overshadow the positives.
In the near term we believe the Zacks #1 Rank (Strong Buy) peers like SunPower Corporation (SPWRA) and JinkoSolar Holding Company Ltd. (JKS) are more promising compared to the Zacks #3 Rank (Hold) Suntech Power. In the longer run, our Outperform recommendation on the stock indicates that it should perform above the broader market.
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