Daniel Englander
GT Solar To Build Turnkey IPO July 22, 2008 at 10:43 AM
There’s been a run on adult diapers as the equity analyst crowd gets ready for what may be the most anticipated solar IPO in recent memory. GT Solar, a New Hampshire-based manufacturer of production equipment for wafer and panel makers (they’re a manufacturer’s manufacturer), is set to debut on the NASDAQ sometime this week, more than a year after the company postponed its first filing. The latest go around has GT Solar anticipating a $530 million day, more than twice its original expectation a year ago. If it happens at the scale GT anticipates, this will be the largest U.S. solar IPO. But will it sell?
The rush to expand production capacity in the last two years has created a big opportunity for equipment manufacturers in both the silicon and thin film space. While Applied and Oerlikon have become household names (though in many ways, they already were), smaller companies like Spire and GT Solar have quietly trucked along, raking in the big bucks on the back of huge growth in the Chinese midstream and downstream production markets. GT Solar’s revenue quadrupled during FY 2008 to $244 million, with 97 percent of its revenue coming from China. This is likely to continue as the market converges on cost-based production centers. Oerlikon, for example, has already announced plans for significantly expanding its presence in the Asian market.
But with solar stocks still shaky (five times fast!) and policy uncertainty in Spain and the U.S., how certain can GT Solar be of a successful IPO? Morningstar analyst Rick Hanna said recently, “a hot solar market for them is like a gold rush: The miners might not know for sure whether there is gold in the hills, but it sure is good to be the company selling picks and shovels to them.” I’ll agree with Shovelman Rick on this one, though, with one caveat. How long will it be until a Chinese company gets to where GT is today and kicks them down a few notches in their primary market?
Now stay tuned for Steve Pluvia to tell us none of this matters because First Solar and Applied will rule the world!!!
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