New | China’s solar companies look like good bets as green energy gains momentum, analysts say
China’s solar companies are reshaping themselves for a brighter future
Solar glass manufacturer Xinyi Solar, and other leading solar energy-related companies, are garnering attention from analysts who say that they are likely beneficiaries of the massive push to embrace green energy in China and elsewhere around Asia.
These companies are reshaping their business models into what amounts to a better deal for investors, embracing a new direction that could make them worthwhile additions to an investment portfolio, according to Jefferies.
It’s an important shift for an industry that has been criticised by some analysts for cyclical earnings that tends to reward only those investors nimble enough to get in and out of the shares of solar companies at the right time.
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“The industry’s transition from a more commodity-like business to a more annuity-like business bodes well for investors,”Jefferies analysts said in a report dated October 17.
This year is set to mark a record for the roll out of solar panels in China. Things are also looking up for the long term, as China is likely to add 20GW to 25GW of photovoltaic capacity per annum through 2020, according to Jefferies.
The state-run Xinhua news agency reported earlier this month that Beijing planned to raise the national capacity target to 150GW from 100GW by the end of the 13th Five-Year Plan, which runs from 2016-2020.
Xinyi Solar, which is listed in Hong Kong, is the largest maker of solar cover glass in the world, with approximately 30 per cent global market share, according to JP Morgan Asia Pacific Equity Research.
