SOL is ‘En Fuego’

Renesola Ltd (SOL), $21.67, is on fire over the past several weeks since its IPO debut in January. Volume has been exploding as the stock is up almost 200% since it’s low in late March. I have been watching the stock as it has crossed dozens of nightly screens but decided not to post it to the blog until now.

If you want momentum, SOL is currently providing it. The stock was up more than 15% today on volume 409% larger than the average. At least 11 accumulations days have occurred over the past month as the stock started to log new all-time highs.

The stock is the latest in my pursuit of profits in Chinese, Solar and IPO combinations over the past 12-15 months. JASO was the original poster-child but SOL is now catching my attention. I don’t own shares as of this writing but that could change on the proper entry opportunity (I don’t have one at this time but I will update if and when it happens).

ReneSola, Ltd., through its subsidiaries, engages in the manufacture and sale of solar wafers and related products in the People’s Republic of China. It offers feedstock, ingots, and wafers for the solar industry. The company sells solar wafers to Chinese and international PV cell manufacturers.

Gushan (GU) Making a Move

I wrote about “The Next Chinese IPO – GU” on Wednesday, December 19, 2007 and consider it the first unofficial “stock of the day” of 2008. The stock was up 18.27% on volume 252% larger than the average; the largest volume spike since the stock’s IPO debut.


Fools like Cramer and CNBC said the stock was under the radar until today but readers here have known it was out there and has potential in the upcoming year. It touches upon a few hot topics and stock drivers from the past couple of years: energy, china and IPO’s. Three categories that are not unfamiliar on this blog (especially in 2007). It does scare me that Cramer (profit jinx) mentioned Gushan today but I will ignore the superstitions and continue to follow the stock while grabbing shares.

A second firm from Wall Street decided to initiate coverage on the stock with a buy recommendation. I labeled the stock a buy the day it debuted and maintain that analysis based on my fundamental and technical research:

“The Next Chinese IPO:
Now it’s time to jump on the next IPO that’s about to debut on New York Stock Exchange under the symbol “GU”. Chinese biodiesel fuel producer Gushan Environmental Energy Ltd. (GU) said it plans to raise about $171.6 million in an initial public offering of American Depositary Shares (ADS).”

Earnings Estimates:
FY 2007: $1.02E
FY 2008: $1.52E +49%
FY 2009: $2.00E +31%

Revenue (in millions):
2002: 5,258
2003: 10,422
2004: 23,793
2005: 49,840
2006: 113,891

Net Income:
2002: 2,080
2003: 5,361
2004: 10,245
2005: 21,069
2006: 45,972

PEG Ratio: 0.77x
P/E Ratio: 38.49

Why the surge today? The stock seemed to be following a surge in the Shanghai market.
Another stock of related interest higher today: YGE, up 13.38% on volume 60% larger than average66666666666666666666666

China Sunergy Co. (CSUN)

Stock of the Day
China Sunergy Co. Ltd. (CSUN)
Friday’s Opening Price: CSUN – $16.15

Sector: Technology
Industry: Semiconductor (Solar)
52-week Price: $4.83 – $19.23

2007 “Stock of the Day” stocks gained an average of 43% (32 total stocks).


China Sunergy (CSUN) is part of a booming solar industry that includes stocks such as the ones listed below; all head lined by FSLR, a stock that is up more than 700% over the past year or so. This industry is said to grow from about $15 billion to more than $69 billion over the next 5-10 years. Growth like that will flow down to the group leaders such as the ones below. FSLR, STP and YGE are currently the leaders. I am actually looking to get my hands on a few shares of Yingli Green Energy Holding (YGE) and will present a case study analysis (stock of the day) next week. The next pullback will be the ideal entry and that looks to be coming over the next several weeks (an entry between $30 and $35 is looking fine). Enough of YGE!

China Sunergy Co., Ltd. and its subsidiaries engage in the design, development, manufacture, and marketing of solar cells in China. The company manufactures solar cells from silicon wafers utilizing crystalline silicon solar cell technology to convert sunlight directly into electricity through a process, known as the photovoltaic effect.

The is my first Chinese stock coverage of the new year, extending a trend that was very successful in 2007 with stocks like BIDU, JASO, EDU, MR, PTR and FSLR. I don’t know if CSUN will follow through but the company looks interesting. However, the more I do this analysis tonight (Thursday night), the more I like YGE.

Recent revenue, net income and future earnings all catch my attention and can play major roles in the driving force of the stock’s future price.

Sister Stocks (Top Rated Industry by IBD):
FSLR – $265.87
STP – $88.22
SOLF – $36.95
YGE – $38.02 (another stock I am looking to add)

Potential Trade Set-up:

[Read more…]

The Next Chinese IPO – GU

We’ve had a very successful year here on with Chinese stocks, specifically Chinese IPO stocks.

Of the five Chinese stocks I have owned, JASO has been the top performer in my portfolio from start to finish. BIDU is a close second and would have been first by a long shot if I had held the entire time. The others are MR, PTR and EDU.

The Next Chinese IPO:
Now it’s time to jump on the next IPO that’s about to debut on New York Stock Exchange under the symbol “GU”. Chinese biodiesel fuel producer Gushan Environmental Energy Ltd. (GU) said it plans to raise about $171.6 million in an initial public offering of American Depositary Shares (ADS).


According to an SEC filing, Gushan is selling 15 million ADS, and a group of selling shareholders is offering 3 million ADS. Each ADS represents two ordinary shares. Gushan expects the offering to price between $11.50 and $13.50 per ADS (assume $12.50 per share to equal the $171.6 million mentioned above).

The company plans to use a majority of the IPO proceeds to expand its production capacity by buying manufacturing equipment and constructing additional facilities. Remaining proceeds will be used for research and development efforts and for other general corporate purposes.

According to an Associated Press article, Gushan is the largest biodiesel producer in China in terms of annual production capacity in 2006. The company produced and sold 136,587 tons of biodiesel in the first nine months of 2007, and aims to increase annual production capacity to 400,000 tons by the end of 2008. An increase of almost 200% (something that peaks my interest).

What is Biodiesel?

Biodiesel is a renewable, clean-burning and biodegradable fuel produced from feedstocks such as vegetable oil, animal fat and recycled cooking oil. Typically blended with diesel fuel, biodiesel is used in the diesel engines of trucks, mass transit vehicles, ships and generators. Additionally, the byproducts of biodiesel production have numerous commercial applications in the food, pharmaceutical and manufacturing industries.


For the nine months ended Sept. 30, the company reported income of $33.4 million, compared with $36 million in the prior-year period. Revenue for the period rose to $98.3 million from $81.5 million in the first nine months of 2006.

Merrill Lynch & Co. is serving as lead underwriter of the offering. CIBC World Markets and Piper Jaffray are also underwriting the IPO. The selling shareholders have given the underwriters the option to buy up to 2.7 million additional ADS at the offering price to cover any overallotments.


  • China Biodiesel International Holdings
  • East River Energy Resources
  • PetroChina

Tuesday Update (I wrote this piece over the weekend):
Chinese biodiesel producer Gushan Environmental Energy Ltd on Tuesday raised about $173 million with an initial public offering that priced below expectations. (Not Good – this sector is getting hit over the past week)

The 18 million offering of American depositary shares sold for $9.60 apiece, compared with a forecast range of $11.50 to $13.50, according to an underwriter.

My View on Chinese Stocks in General (12/19/07):
I understand that the Chinese market is currently in the middle of a bubble type run but who is to say when that bubble will end. Bubbles can last a lot longer than many believe. You can try to predict when it will end but I will continue to trade it until is really ends! I’ll let you know where I get in and how the trade sets up. I am five for five with Chinese stocks in 2007 so why not jump in and grab another. I had people tell me I was crazy ten months ago when I was buying stocks like EDU and MR (bought JASO and BIDU a few months later).

The stock may or may not work but I trade opportunities, not predictions! What do you trade?

3SBio (SSRX) on the Move

3SBio Inc. (SSRX) is up over 5% in trading today and now has a 28% gain since I highlighted it on the blog earlier this month at $17.34. Volume has been exploding as the stock reaches new highs and continues to play a role in the China bull market!


The stock made it’s debut in a post where I asked the question:
Is SSRX the Next JRJC

A run to $30 is not out of the question based on the recent infatuation with Chinese stocks (similar to our tech stocks of the late 1990’s).

I will look to grab a small position in the AM tomorrow (keep my exposure low due to a lack of an ideal risk/reward setup).

SSRX then went on to make a screen titled, IPOs on the Move which I uploaded earlier this week at $18.60.

SSRX – 18.60, the stock has popped 16% in early morning trading as it breaks the recent five day consolidation range. It is back within striking distance of new highs. Early morning volume is 1,500% larger than the average.