North Coast Solar Stocks

December 10, 2009

Trony pulls IPO

Filed under: STRI, TRO — Tags: , , , , , , — Jason @ 5:08 pm

Thu Dec 10, 2009 5:08pm EST

* Trony Solar IPO postponed indefinitely — underwriter

By Clare Baldwin

NEW YORK, Dec 10 (Reuters) – Chinese thin film solar company Trony Solar Holdings Co Ltd (TRO) postponed indefinitely its IPO due to weak market conditions, an underwriter said.

“Most liquidity is gone for new names. Books are just closed,” said Morningnotes.com founder Ben Holmes.

Holmes said year-end initial offerings often struggle.

A CROWDED MARKET

Shenzhen, China-based Trony Solar posted increased revenue and profits compared with a year ago, but likely postponed its offering amid concerns about future profit growth, analysts said. The offering would have been worth about $241.5 million, according to a regulatory filing.

Despite signs of a pickup in the industry, solar companies trying to go public are still struggling.

In November, Connecticut-based STR Holdings Inc (STRI), which makes products to hold solar modules together and protect them, priced below an already-reduced expected range. And last week Danish wind and solar park developer Scan Energy 18SE.DE canceled its IPO on weak demand from investors.

Chinese solar manufacturers typically have lower production costs, but tough competition in the sector and sluggish sales for the renewable energy systems outside China likely hurt the launch, said IPO Boutique senior managing partner Scott Sweet.

“The playing field is getting extremely crowded,” Sweet said. “Overseas, the sales have been light and some of the subsidies for solar have been pulled.”

Solar companies have struggled this year as prices for their cells and panels have fallen by half because of oversupply in the market. But demand has begun to pick up, raising hopes the industry will resume its steep growth path in 2010.

Simmons and Co analyst Burt Chao said Trony may benefit by waiting.

“It seems like most people are getting pretty excited about solar headed into the first half of next year. It would behoove management teams to wait a little bit for that to materialize to get a little bit of the upswing and the momentum,” Chao said.

JPMorgan Special Situations (Mauritius) Ltd and Intel Capital Corp, which currently own a combined 11.9 percent of the company, had each planned to sell half of their shares. Underwriters were led by J.P. Morgan and Credit Suisse.

Three more IPOs are set to price on Thursday evening, including China-based Concord Medical Services Holdings Ltd, Ellington Financial LLC and KAR Auction Services Inc.

(Additional reporting by Steve Eder, Matt Daily and Laura Isensee; editing by Phil Berlowitz and Andre Grenon)

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