China Sunergy (Nasdaq:CSUN) Reports - Stone Maintains NEUTRAL Rating

Mar 11, 2010
Author: SCP Editor

March 11, 2010 – Analyst Comments – Cowen’s Rob Stone commented on China Sunergy’s (Nasdaq:CSUN) financial results for Q409 and FY09, reiterating his NEUTRAL rating. Stone noted that “The CEO did not attend the conference call, and the presentation by management created the impression that the outlook  and strategy are quite uncertain.”

Stone hinted that the technology could be attractive from some kind of strategic alliance or combination.

Financial Performance

China Sunergy (Nasdaq:CSUN) reported Q4 revenues of $97.6 million, up 21.8% sequentially and 125.9% on a Y/Y basis. Gross margin was 10.7%, compared to 10.2% in Q309 and negative gross margins for Q408. Net loss for Q409 was $3.5 million, or $0.09 per diluted ADS, compared with net income of $7.8 million for Q309 and a net loss of $26.8 million in Q408. The company shipped 74.3MW, compared with 54.4MW in Q309 and 14.1MW for the same period last year. Blended ASPs during Q409 were $1.26/watt, down sequentially from $1.32/watt. Blended ASPs for Q408 were $2.97. Wafer costs for Q409 were $0.80/watt, compared to $0.87/watt in Q309.

FY09 revenues were $284.9 million, down 18.8% Y/Y, on shipments of about 194MW, compared to 107.2MW for FY08. Gross margin was 5.8%, compared with 4.4% in 2008. Net loss for the year was $9.8 million, or $0.25 per diluted ADS, compared with a net loss of $22.9 million for FY08. Blended ASPs for FY09 were $1.36/watt, compared with $3.32/watt in FY08. Wafer costs for the year were $0.95/watt, compared to $2.78/watt in 2008.

In terms of guidance, management expects Q1 shipments to be between 68MW to 75MW with a gross margin between 12%-14%. For FY10, it expects to ship between 280MW to 350MW.