06 October 2011
2012 preferred companies
In the world of contracting price, the one who is able to sell with the profit becomes the leader. Solar has grown over 120% in 2010. The entire industry had doubled. Many new entities decided to turn into making solar products. They have created massive quantity of fungible stock, which today contributes to devaluation. Even moderate growth of 20% in 2011, is not going to deplete this excess. However, the phenomenon of demand is seen by some. The future of the competition will be fought on many fronts, but lines of separation are already forming.
Quality
It means the ability to deliver the top-notch products, support it through warranties, provide for the best conversion and deliver more efficiency. Who can do this? Only rich in cash, stable and full of human resources companies can embark on this. Cash flows buy intellectual property.
Scale
Ability to produce cheaply with quality requires the right amount of scale. Scale improves cost, and the low cost is the contributor to profitability. In order to achieve this, capacity must be available. The distinction between capacity and utilization is precisely the difference between ability and execution.
Brand
In today’s society, popularity is derived from quality. When all is amounted to same (price), customer will prefer brand over no-name. Marketing strategies build names,and those strategies are only afforded by cash. Cash and access to cash will sell products.
Cost efficiency
Cost of production comes in many shapes. Better application, proficient tools, less handling, cheaper materials are some of the essentials. Labour, taxes, administration,experience and innovation can reduce costs.
Cash availability, partnerships, current versus future profitability
There is no direct link between future profits based on profit today. However, there is a logical assumption for a company
which has a loss now to have one tomorrow if conditions worsen and no changes are made.
Partnership, merger can change the momentum. Cash can buy change.
Test results:
| Profit H1 | Profit Q2 | Quality innovation | Brand | Scale | Cost efficiency | cash availibility | Strong partnerships value chain | Revenue growth | GM | Revenue and GM growth | Other factors total | Total score | |
| Yingli | $0.71 | $0.36 | y | y | y | y | y | YES-OCI | 0.6 | 0.24 | 0.84 | 6 | 6.84 |
| Trina | $0.80 | $0.17 | y | y | y | y | y | YES-GCL | 0.6 | 0.22 | 0.82 | 6 | 6.82 |
| Jinko Solar | $3.48 | $1.38 | y/2 | y/2 | y | y | n | n | 2.89 | 0.26 | 3.15 | 3 | 6.15 |
| GCL Poly | $0.03 | + | y | N/A | y | y | y | YES-Modulers | 1.62 | 0.39 | 2.01 | 4 | 6.01 |
| First Solar | $2.03 | $0.70 | y | y | y | y | y | n | -0.05 | 0.41 | 0.37 | 5 | 5.37 |
| Canadian | $0.30 | $0.16 | y | y | y | y | n | YES-GCL | 0.39 | 0.14 | 0.53 | 4 | 4.53 |
| Daqo | $1.73 | $0.73 | N/A | N/A | N/A | y | n | n | 0.62 | 0.49 | 1.11 | 3 | 4.11 |
| Renesola | $0.49 | $0.02 | y | Y/3 | N/A | y | y | Not particulary | 0.32 | 0.24 | 0.56 | 3.3 | 3.86 |
| SolarWorld | 0.28 | $0.13 | y | y | N/A | N/A | y | Not particulary | -0.09 | 0.22 | 0.13 | 3 | 3.13 |
