First Solar (FSLR) Should Give Up On China Strategy

David Phillips of 10Q Detective wrote up a great piece on why First Solar (FSLR) should abandon its China strategy.  The US solar behemoth made headlines a year ago when it announced it would work with the China government and local businesses to develop a massive 2GW solar farm to power up to 3 million homes.

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Phillips suggests FSLR abandon it’s strategy in China for several reasons..

– the project has already stalled.. although the company says construction is expected to begin next year

– the costs will be too high and subsidies too low to provide a return

– it’s very difficult to compete in China as China favors its own.. something the US should learn from

– FSLR would have to share its proprietary technology, opening up risk of Chinese stealing proprietary manufacturing processes.  Phillips highlights Vestas Wind as a prime example of this

Read the full article here

While shares of FSLR have looked increasingly bullish in recent weeks, it’s a bit overstretched in the short term and may need to pull back to the 132 – 138 range which provide an area to add shares in my opinion.

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