“breakthrough … from a tiny company deep in China’s heartland”

By Travis Johnson, Stock Gumshoe, March 22, 2007

Another tease from Robert Hsu and his Chinese stock advisory service, sent in by a reader — this time, the breakthrough is in solar power, and the tease lays the groundwork with two keys:

One, China is in desperate need of power (mention Three Rivers Dam, oil exploration in Africa, thirst for growth). They have huge incentives to go with alternative and clean energy. No argument there.

And two, China can use cheap resources (people) for manufacturing. Also hard to dispute.

That leads him to …

A photovoltaic cell manufacturer in China, that avoids the polysilicon price spikes by using monocrystalline silicon, and uses cheap factory labor to build their cells.

Let me make a confession: Although I’m an investor in a major polysilicon manufacturer, MEMC Electronic Materials (WFR), I have no idea what the difference is between polysilicon and monocrystalline silicon (though my WFR investment is up more than 200% — maybe I should try to sell you a newsletter!). Hsu says the one this company uses is much cheaper, I’ll take his word for it.

Some other hints:

The price rose 9.2% “last Monday” (I think this must be March 12 by the email date)

Revenue has surged 564% in the last nine months.

The stock has “jumped 110%” (no mention of the time frame) … and “there’s plenty more where THAT came from.”

And the final clue … the one that we could have probably used to answer this quite easily without all of the bove … this company is listed on the New York Stock Exchange.

So really, since we already know this isn’t Suntech Power (which HSU brags about separately in this email), there’s only one company it can be … we might not even have to turn on the Stock Gumshoe Thinkolator Machine …

… drum roll please ….

Robert Hsu’s next alternative energy play in China is Trina Solar, Ltd. (TSL)

See, there are only two Chinese solar companies listed on the New York Stock Exchange, Suntech being the other one.

And the other stuff fits as well, of course — the 110% gain is since the company’s IPO on the NYSE in December. And the shares did jump up just shy of 10% last Monday (though they gave back those gains pretty quick).

I don’t know whether TLS or STP is a stronger investment — from what I quickly saw in researching this, STP also uses that “monocrystalline silicon” Hsu mentioned, though I also know they’re major buyers of polysilicon from MEMC Electronic Materials. So I don’t know whether that concept is just a red herring, or if the two kinds of silicon are really fundamentally different at all. You could also go with a company like First Solar, whick I understand uses different raw materials entirely (though I haven’t bothered to find out what they are).

But I do know that, thanks to your friendly Stock Gumshoe, you don’t have to subscribe to an expensive newsletter just to find out what company Robert Hsu is pushing today.

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