Wedbush Analyst Initiates Coverage On China Solar Stocks, Top Pick TSL

This morning an analyst at Wedbush has initiated coverage of several China solar stocks according to Street Insider

They are the most bullish on Trina Solar (TSL) with an Outperform and $25 price target.
CSIQ, SOLF and YGE get Neutral ratings with price targets of $22, $7 and $11 respectively.
It has some concerns about Suntech (STP) so has an Underperform rating and $10 price target.

“Chinese module manufacturers have been gaining global market share in the PV marketplace by offering quality modules at lower prices.” Wedbush also points out that these manufacturers “have access to low cost credit and financing from Chinese banks…”

Wedbush believes that “low cost competitors will be better positioned in an oversupply environment in 2010-2011.” The firm names Trina Solar its top pick, but also notes that Yingi has one of lowest manufacturing cost per watt of the publicly traded Chinese module makers. Specifically for Trina, the firm notes that the company will “benefit from its proximity to key suppliers in its Changzhou manufacturing complex.”

On the other side of the trade, Wedbush argues that Suntech will underperform its group “as it has committed to multiple strategies and has historically been awarded a high valuation.” Further, the firm said it was concerned about Suntech’s “move into downstream project development given that the core competency of the company is manufacturing solar modules.”

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The China solar stocks are off just a bit this morning down 1-2%.

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