Strong 3Q shipment guidance a catalyst
We expect Asian solar companies to forecast strong 3Q shipment growth of
40-80% QoQ when companies announce 2Q results in the coming weeks. We
attribute the stronger 3Q earnings outlook to (1) rising utilization (over 80%) on
strong orders uptake since late June, (2) moderating ASP erosion of 5-10% in 3Q
and (3) continued digestion of higher-priced material inventories. While some
investors may sell into 3Q strength due to slow seasonality in 4Q, we recommend
investors accumulate leaders such as STP, TSL and YGE on weakness.