Leading global manufacturer of solar products, ReneSola Ltd. (SOL), may repurchase up to $100 million in aggregate value of the company's outstanding ordinary shares under its share repurchase program.
Within a limited period, ReneSola is authorized to execute its buyback program, depending on market conditions, share price and other factors. The company is also permitted to make one or more purchases on the open market or in privately negotiated transactions.
Recently, ReneSola Ltd. reported second quarter 2011 adjusted earnings per American Depositary Share (“EPADS”) of 5 cents, falling short of the Zacks Consensus Estimate of 15 cents and the year-ago quarterly earnings of 42 cents per share.
ReneSola at the end of the reported quarter had cash and cash equivalents of $480.8 million, compared with $435.9 million at the end of the sequentially preceding quarter. Total debt was $560.7 million, compared with $522.8 million at the end of the first quarter of 2011. With this healthy cash position, the company believes that the share repurchase program will generate value for its shareholders.
ReneSola enjoys a geographically diversified customer base, ongoing expansion programs, a subsidy program in China, and improving operating efficiencies. Despite relatively weak capital markets and a challenging solar market, the company is confident of the long-term prospects of its business.
Going forward, the company expects to benefit from its Virtus wafer technology, increasing in-house polysilicon production and its strong leadership position in wafer production to capitalize on new opportunities.
However, the near-term valuation of the company will be adversely impacted by apprehensions over tepid module demand in Europe, subsidy roll-back in Germany, rising competition, credit risk from its customers and the company’s high research and development expenses. The company presently retains a short-term Zacks #4 Rank (Sell). We have a long-term Neutral recommendation on the stock.
ReneSola, based in China, is a leading global manufacturer of solar wafers and producer of solar power products. Capitalizing on proprietary technologies, economies of scale, low-cost production capabilities and technological innovations and know-how, ReneSola leverages its in-house virgin polysilicon, solar cell and module production capabilities to provide its customers with high-quality, cost-competitive solar wafer products and processing services.
The company possesses a global network of suppliers and customers that includes some of the leading manufacturers of solar cells and modules. The company competes with LDK Solar Co. Ltd. (LDK) and MEMC Electronic Materials Inc. (WFR) among others.
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