ReneSola Soars 13% on Strong Revenue Guidance, Recent Sales
The stock in ReneSola Ltd. (NYSE: SOL) surged 13% to $1.64 per American depositary share on Tuesday morning after the company raised its revenue guidance for the third quarter, thanks to the sales of its solar development projects.
The Shanghai-based solar project developer announced today it expects to generate revenue in the range of $55 million to $60 million for the three months through September. Earlier, ReneSola issued revenue guidance of between $15 million and $20 million.
"As we discussed earlier in the year, some project sales were delayed into the second half, but with focused team work we were able to close many transactions more quickly than we planned at the start of the third quarter," Shelley Xu, the chief executive officer of ReneSola, said in a statement on Tuesday.
Xu added, "Sale activity is increasing across many of our geographies, helping to accelerate our business momentum. We are confident in our ability to successfully monetize our robust project pipeline in the coming quarters."
ReneSola also cut its gross margin guidance to between 15% and 17% for the third quarter, down from its previous estimate of 35% to 40%
Within the past two weeks, ReneSola reported selling a number of projects. A few were in China, with an aggregate capacity of 22.3 MW. Another was a 55 MW portfolio of solar projects in Poland and the most recent, announced on Monday, was a 13.9 MW project in Hungary.
Ella Li, a ReneSola representative, said the company is planning to pursue the sales of its other completed projects.
"Sometimes, projects take longer than we expect to develop and monetize," Li told CapitalWatch in an email on Tuesday. "The surge in sales is really just a function of timing for sales we always planned for this year."
Despite the positive development in trade talks between the United States and China, no reports have been made regarding the 25% tariffs on bifacial solar panels scheduled to take effect on Oct. 28. Li said ReneSola was not concerned about the trade and political tensions between Beijing and Washington that has weighed on the solar industry.
"From our own perspective, we have local offices developing business in all of our regions, and those offices can source modules and other equipment from around the world," Li told CapitalWatch. "So our business is really more an aggregation of local businesses, and thus is not highly impacted by the US-China tensions."
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