Leading global manufacturer of solar products, ReneSola Ltd. , announced that the company repurchased 645,424 of its outstanding ordinary American Depositary Shares (“ADSs”). Earlier in August 2011, ReneSola had announced a repurchase program of $100 million of its ADSs. The focus of the company in increasing value for its shareholder is evident from the $100 million program as the current market capitalization of the company is only $260 million.
ReneSola at the end of the second quarter of 2011 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 is comfortable with the share repurchase program.
Earlier, ReneSola Ltd. reported second quarter 2011 adjusted earnings per American Depositary Share (“EPADS”) of 5 cents, short of the Zacks Consensus Estimate of 15 cents and the year-ago quarterly earnings of 42 cents.
ReneSola enjoys a geographically diversified customer base, ongoing expansion programs, a subsidy program in China, and improving operating dynamics. Despite relatively weak capital markets and a challenging solar market, the company is confident of its long-term prospects.
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 #3 Rank (Hold). 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’s global network of suppliers and customers includes some of the leading manufacturers of solar cells and modules. The company competes with LDK Solar Co. Ltd. (NYSE:LDK) and MEMC Electronic Materials Inc. (NYSE:WFR) among others.