(Corrects investment to LDK’s polysilicon unit in sixth paragraph.)
May 27 (Bloomberg) -- LDK Solar Co., a Chinese maker of solar panels, climbed after its president said the industry would rebound this quarter and a China Development Bank Corp. unit received approval to buy a stake.
LDK rose 41 cents, or 6.2 percent, to $7.02 at 6:47 p.m. in New York Stock Exchange composite trading. Earlier it gained as much as 63 cents, or 9.5 percent.
Cuts to European government incentive programs have driven down sales of solar panels, and LDK’s President and Chief Operating Officer Xingxue Tong said the market is poised to improve. “The industry hit a low point in the first quarter,” he said in an interview published today by the Taiwanese electronics daily DigiTimes. “The solar industry is not as bad as the general view, and should rebound in the second quarter.”
Wayne Chang, analyst at Brean Murray, Carret & Co. in New York, said demand for solar panels is about to take off. “We think the market comes back strong in June, with inventory workdowns in two to three weeks and orders starting to flow fairly aggressively,” he said today in an e-mail.
The investment from China Development Bank Capital Corp. may be “a positive read-through” for investors, Chang said.
China’s economic planner National Development and Reform Commission approved the development bank unit’s purchase of an equity stake in LDK’s polysilicon production unit LDK Silicon & Chemical Technology Co., according to a statement released Thursday by the commission. It did not say how large a stake the unit may buy.
LDK also won a 45-megawatt panel supply contract with an Italian solar systems installer, the company said yesterday in a statement, without naming the buyer.
Today’s rally may be driven by investors buying shares before LDK releases its earnings on June 7. “We think this is just a bounce before they report, since most of the negative news for the sector is pretty much baked in,” Chang said.
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