It’s true that the economic slump is being felt around the world.
Companies are not giving up, however – they’re fighting back.
Especially when it comes to Chinese solar production companies.
Despite earnings losses in the past year, two solar companies are putting in more to achieve a better outlook.
The solar market could see a big boost coming up.
LDK Solar Company Ltd.
LDK Solar (NYSE: LDK) is a solar wafer and module production company based in China.
According to CEO Xiaofeng Peng, the company’s American Depository shares (ADSs), trading on the New York Stock Exchange, are “grossly undervalued”.
For this reason, LDK has announced that it will spend up to $110 million buying back these shares to increase revenue.
The shares have recently dropped 40% due to subsidy cuts in Europe, one of China’s largest solar markets, and because of low revenue in the first quarter of 2011, as well as a bleak outlook for the second quarter.
This decision may flip that outlook around.
The ADSs closed at $6.81 on Friday, but news of this buyback increased the shares by about 5.7% to $7.20 on Monday morning.
China Sunergy Company
China Sunergy (NASDAQ: CSUN), Yangzhou, China-based solar cell and module manufacturing company, is also announcing growth plans.
The company plans to invest around $277.9 million in adding another gigawatt of production capacity.
$77 million of this would be a loan from the China Electric Equipment Group Corp., and the rest will come from credit facilities.
The increase would center on Quasar cells, a high-efficiency type of photovoltaic cell that currently has an average production capacity of 18.6%.
The additional 1GW is expected to increase cell efficiency to 20%.
By the first half of 2012, China Sunergy hopes to have the first 500MW commercialized, an increase that officials hope will bring production capacity up to 19%.
Yi Zheng Economic Development Zone has offered China Sunergy around 82 acres of land near the city of Yangzhou for their industrial development.
This land will give the company access to drainage, water, electricity, heating, gas, telecommunication, and it will also offer a power station of 110KV, according to the Wall Street Journal.
Shares of CSUN have been down by about half this past year. This production increase could offer a nice boost.
Shares closed on Friday at $2.10.
That’s all for now,