Stocks & Investing
Stocks and Investing
Stocks and Investing
Tue, November 30, 2010 Ford Motor, General Motors, Evergreen Solar, Suntech Power Holdings Company and ReneSola
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Ford Motor Co. (NYSE: [ F ]), General Motors (NYSE: [ GM ]), Evergreen SolarInc. (Nasdaq: [ ESLR ]), Suntech Power Holdings Company Ltd. (NYSE: [ STP ]) and ReneSola Ltd. (NYSE: [ SOL ]).
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Here are highlights from Mondaya™s Analyst Blog:
Ford Expands Dealership in China
Ford Motor Co. (NYSE: [ F ]) has added 40 new dealerships in China as a part of its major expansion plan to strengthen its foothold in the fast-growing market. Further, the automaker plans to bring in 66 new dealerships by the end of the year, raising its total dealership to 340 in the country.
All the dealerships will be added in the tier-two and tier-three cities in China including Nanning, Shijazhuang, Harbin and Anyang, each with a population of over one million. As the tier one cities become saturated, the company believes that the cities in the following tiers would provide further potential for growth with their overall improvement in a larger sphere encompassing education, health care and real estate.
The Chinese auto industry being the apple of Beijinga™s eye is being further boosted by government incentives that coax car owners to shift to more environment-friendly and fuel-efficient cars and minivans. While the domestic automakers (especially small car manufacturers) received most of the incentives, foreign automakers including Ford and General Motors (NYSE: [ GM ]), benefited from them as well.
According to the China Passenger Car Association, passenger car sales soared 36% to 11.1 million vehicles during the first 10 months of the year. In contrast, Forda™s sales in China surged 39% to 468,754 vehicles during the same period.
Sales in China are expected to grow by 33% to 18 million vehicles for 2010 from less than 13.5 million vehicles in 2009 and by 10%a"15% for 2011.
Ford has been pursuing a major expansion plan in the emerging countries, including Argentina, Brazil, China, India and Thailand. Through the expansion plan, the automaker aims to tap the growing market potential in the countries, especially those in Asia.
Since last year, Ford has invested $510 million in China and $500 million in India as part of its expansion plan. Recently, Ford and Japana™s Mazda Motor announced their plan to invest $350 million in their Auto Alliance joint venture plant in Rayong, Thailand. This comes on top of a $450 million investment for a new plant at the same location made in June this year.
In the first 10 months of the year, Forda™s sales in the Asian-Pacific and African regions shot up 39% to 731,724 vehicles. Ford anticipates 70% of its sales growth to come from Asia Pacific and Africa region in the next 10 years, mostly from China and India. Industry sales in the region are expected to grow from 16 million units in 2009 to 35 million units by 2018.
Evergreen Solar Sunnier in England
Massachusetts-based Evergreen Solar Inc.a™s (Nasdaq: [ ESLR ]) fortunes look sunnier in England after a panel variant of the company, ES-A series qualified for the Microgeneration Certification Scheme (MCS) of the United Kingdom's Department of Energy.
The certification is mandatory for solar panels to be used for the Renewables Cash-Back Scheme and therefore, vital for Evergreen Solar. The Renewables Cash-Back Scheme has been active in the UK since April 2010.
Per the scheme, homeowners and communities along the coast who install solar panels are even paid for the electricity they generate and consume themselves. Given the fact that the UK has more than 19,000 miles of coastline, the certification is an early Christmas gift for Evergreen Solar.
Evergreen Solara™s spotlight on U.K. comes at an opportune moment with The UK Renewable Energy Strategy (RES), aiming to generate 15% of overall energy consumption from renewable sources by 2020. The companya™s focus on increasing its revenue base outside its two major markets (U.S. and Germany) will augur well over the longer run. In the third quarter of 2010, the company generated more than three-fourths of its revenues from the above two markets.
Evergreen Solara™s geographically diversified contractual backlog, ongoing expansion programs of its manufacturing process in China, improving operating efficiencies and technology upgrades will help maintain its positive momentum.
We expect Evergreen Solar to narrow its losses in fiscal 2010 with a loss per share of 38 cents compared to a loss of 53 cents in fiscal 2009. However, continuing near-term losses due to start-up costs, capital expenditures, apprehension over a subsidy roll-back in Germany and earnings dilutive stock issuances may stunt the near-term share price upside potential.
Competition in the industry is becoming tougher by the day for U.S. solar energy players such as Evergreen Solar, who have a huge German bias in their top line compared to its counterparts such as Suntech Power Holdings Company Ltd. (NYSE: [ STP ]) and ReneSola Ltd. (NYSE: [ SOL ]) whose markets are more diversified.
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