The plunge in stock markets of the past week, led by a melt-down in China, has put into question the ability of chinese RE stock to maintain the levels at which they are currently priced.
Many of the chinese stocks were smartly priced at IPO level based on “last year’s performance indicating future earnings” which is inaccurate in a market which is moving from high overdemand to somewhat oversupply. The drop in module pricing by about 10-15% has shown that margins are squeezing, as evidenced by the recent quarterly reports of Chinese solar companies, like Canadian Solar (CSIQ) as one example.
Buyer beware, even in a blue sky market. Without distinction, companies will be shooting each other in a commodity market, and only the strongest and most agile will survive.
Sass