Solar energy stocks plunge on US tariffs
July 29, 2014, 12:01 am TWN
TAIPEI -- The local solar energy sector took a beating Monday morning after the U.S. Department of Commerce announced over the weekend preliminary anti-dumping tariffs on Taiwan's solar energy products, dealers said.
The current heavy selling in local solar energy stocks reflected gloomy sentiment toward the sector's sales and earnings outlook as the U.S. is one of the major buyers of Taiwan's solar products, dealers said.
Penalty Higher than Expected
With several solar energy stocks, including Motech Industries Inc. (茂迪股份) and E-Ton Solar Tech Co. (益通光能), listed on the local over-the-counter (OTC,櫃檯買賣中心) market, there are worries that the higher-than-expected U.S. anti-dumping financial penalties will affect the performance of the OTC market, dealers said.
As of yesterday, shares of Motech Industries had fallen 6.92 percent, nearly the maximum daily decline, to NT$44.40 (US$1.48), while E-Ton Solar had also dropped 6.89 percent to NT$20.95.
Among the other solar energy stocks listed on the Taiwan Stock Exchange that will also be subject to U.S. anti-dumping duties, Gintech Energy Corp. (昱晶能源) had dropped 6.9 percent to NT$29.00, and Neo Solar Power Corp. (新日光能源) had fallen 6.88 percent to NT$33.15.
The OTC market index was down 1.79 percent at 145.65 points, while the weighted index of the Taiwan Stock Exchange closed down 19.11 points, or 0.2 percent, at 9,420.18.
The U.S. Commerce Department has imposed three different preliminary anti-dumping rates on Taiwanese solar product companies — 27.59 percent on Gintech Energy, 44.18 percent on Motech, and 35.89 percent all others.
The market had been expecting a rate of between 10 percent and 20 percent.
"The anti-dumping financial penalties were higher than market expectations. No wonder these solar energy stocks encountered such heavy downward pressure soon after the local market opened," said Hua Nan Securities analyst Henry Miao.