Accounting Troubles, Weak Demand Stifle China’s Solar Juggernaut

[FBaggins]

Chinese solar PV makers are taking a few more lumps today as investors continue to shy away from a sector that has been damaged by low demand forecasts and accounting issues at several of the larger players. JA Solar Holdings Co., Ltd. (NASDAQ: JASO) replaced its CFO yesterday in just the latest shakeup. Trina Solar Ltd. (NYSE: TSL) has faced similar accounting issues and the news has also affected solid Chinese companies like Suntech Power Holdings Co. Ltd. (NYSE: STP) and Yingli Green Energy Holding Co. Ltd. (NYSE: YGE). Both Suntech and Yingli shares are taking more hits today on relatively little news.

One development that could be weighing on Chinese shares today is a report from Taiwanese solar PV makers that orders for the third quarter are falling off sharply for deliveries after August. Taiwan is not a big supplier of solar PV panels, so it’s possible to draw too general a conclusion from this. What could very well be happening is that customers for all solar PV modules are placing what are essentially just-in-time orders, believing that the 30% price drop so far this year will continue. Inventories remain high, putting more pressure on prices and giving customers even more leverage.

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The bad news about demand has been known for months. The accounting troubles are relatively new, and could continue to put pressure on the Chinese companies for a while yet.

http://247wallst.com/2011/07/14/accounting-troubles-weak-demand-stifle-chinas-solar-juggernaut-jaso-tsl-stp-yge-ldk-fslr-tan/