It's been less than a week since Beijing announced new incentives to help boost its struggling alternate energy sector (previous post), and already we're seeing the first trickle of new deals as state-run entities start to heed the call to help these companies by building new projects. In the first round of what will undoubtedly be many similar announcements in the months ahead, solar cell maker Trina Solar (NYSE: TSL) has signed a contract with a unit of China Power Investment Corp to provide panels for a plant in Qinghai with up to 30 megawatts of capacity. (company announcement) In a similar deal announced at nearly the same time, wind energy specialist Ming Yang (NYSE: MY) has announced its own tie-up with another state-owned entity, the operator of the massive Three Gorges Dam Project, to co-develop wind energy projects in Guangdong province and potentially overseas down the road. (company announcement) Neither of these deals should come as a huge surprise to anyone, as Beijing has indicated for the last few months that it will step up to help these promising but struggling young companies through the worst-ever downturn for their young industry. What is a bit surprising is how fast Beijing has taken action, with these two deals coming just a week after it announced its first concrete incentives to help the sector, which just proves that the central government can move surprisingly fast when it makes up its mind to do something. This coming wave of orders from domestic Chinese power producers, combined with recent positive signs from the global market (previous post) mean the sector will be poised for a sharp comeback in the months ahead, making these beaten down stocks an attractive prospect in the second half of the year.
 

Source:Young's China Business Blog