Boston, MA 10/09/2013 (wallstreetpr) – ReneSola Ltd. (NYSE:SOL) has outperformed all its peers as well as the market, its shares have more than tripled in 2013. In the current gloomy market conditions, ReneSola is a welcome shining light. The price gain has been on the back of higher than expected shipments and increased financial guidance. If the company is able to maintain its current momentum, it will be able to achieve long term profitability. It was able to ship 800 MW of wafers and panels in the last quarter itself leading to an improvement in its gross margins and taking it to 7.3%. The shipments represent a 70% jump over last year and a 28% jump over the last quarter. Though it reported a loss in its second quarter results, it was well below expectations. It is also focusing on increasing its sales realizations.
The company is one of the prominent players in the U.S. solar market and has been getting contracts and agreements regularly. While its peers had to deal with oversupply of solar panels, ReneSola has so far managed to avoid this pitfall. It has diversified its portfolio as well as enlarged its product mix. Currently, ReneSola makes polysilicon, cells, panels, inverters as well as mounting systems. The company is also expanding in Asian, African and European markets instead of concentrating only on the U.S. market. This will offset any demand fluctuation in one market.
The company has also kept debt in tight check with around $700 million of debt and $400 million in cash.
There are some risks also particularly its negative operating margins and overcapacity in production lines in China. The global demand for solar power is driven y strong demand from Japan and China. Overdependence on both countries may lead to issues at a later stage should the demand in both countries dry up quickly. This does not seem to be likely in the near future.
