Alexa
  • Directory of Taiwan

Solar energy stocks plunge on U.S. anti-dumping tariffs

Solar energy stocks plunge on U.S. anti-dumping tariffs

Taipei, July 28 (CNA) 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. With several solar energy stocks, including Motech Industries Inc. and E-Ton Solar Tech Co., listed on the local over-the-counter (OTC) 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 11:26 a.m., shares of Motech Industries had fallen 7 percent, the maximum daily decline, to NT$44.40 (US$1.48), while E-Ton Solar had also dropped 7 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. had dropped 7 percent to NT$29.00, and Neo Solar Power Corp. had fallen 7 percent to NT$33.15. The OTC market index was down 1.26 percent at 146.44 points, while the weighted index on the main board was up 0.05 percent at 9,444.39 points. 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 bourse opened," said Hua Nan Securities analyst Henry Miao. He said it is unlikely that Taiwan's Ministry of Economic Affairs could help reverse or reduce tariffs when the U.S. government makes it final ruling. "I think there is not much chance of that because the U.S.' aim in taking this action is to close a loophole used by Chinese firms that have shifted their production to Taiwan to avoid anti-dumping tariffs," Miao said. The U.S. has imposed preliminary anti-dumping rates of 26.33 to 165.04 percent on imports of solar photovoltaic cells and modules from China and will make a final ruling on Dec. 15, according to the U.S. Commerce Department. Since June, Taiwan's solar energy product suppliers have been adversely affected by the issue, Miao said. Last month, Motech posted about NT$1.5 million in consolidated sales, down 17.41 percent from May, while Gintech's consolidated sales for June fell by a monthly 46.18 percent to NT$917 million. "Now, that heavy financial penalties have been imposed on them, I expect that their shipments will continue to be affected," Miao said. "Amid such gloomy sales expectations, their share prices could trend lower and wise investors should cut their holdings in these stocks," Miao said. Market analysts have been urging Taiwanese firms to diversify their export buyer portfolios by increasing shipments to emerging markets to offset the loss of orders from the U.S., Miao said, adding that it remains to be seen whether such strategies will pay off anytime soon. (By Jackson Chang and Frances Huang)


Updated : 2021-06-23 13:55 GMT+08:00