Suntech Power Holdings Co., Ltd

I. Business Overview

Suntech Power Holdings Co., Ltd. was founded on September 2001by Dr. Zhengroung Shi in Wuxi, China. Suntech Power Holdings Co., Ltd specializes in the production of photovoltaic solar cells and solar electric systems. In terms of production output, Suntech has manufacturing operations in China, the United States, Germany, Australia, France, Spain, Singapore, Switzerland, Greece, Italy, Japan, and South Korea. In 2010, it operated on total operating expenses of $2.7047 Billion and yields a total revenue of $2.9019 Billion. It has long-term debt of $138 million and short-term borrowings of an estimate $800 million. Suntech Power Holdings’ overall stock fell 68% in 2011. In 2011, Suntech’s stock reached a high of $10.71 per share (February 18) and a low of $1.70 per share (October 3). 

II. Entrepreneurs

Suntech Power Holdings is a leading industry in photovoltaic solar cells and solar electric systems. Founded in 2001 by Dr. Zhengroung Shi, Suntech Power Holdings continues to expand and dominate the international market for photovoltaic solar cells and solar electric systems despite the 2008 global financial crisis. Dr. Zhengroung Shi, similar to other entrepreneurs, takes risk of starting and maintaining a business, but unlike most entrepreneurs, he is a social entrepreneur. Social entrepreneurs are entrepreneurs who focus in producing products and ideas that help solve society’s needs and problems. The other two types of entrepreneurships included small and large entrepreneurships. Small entrepreneurships are small business while large entrepreneurships are large companies with a “finite life cycle” (Blank).

Dr. Zhengroung Shi, a renowned researcher and social entrepreneur, helps pray the way for future advancement in clean energy.  Dr. Zhengroung Shi was born in Yangzhong, Jiangsu province, China in 1963. Prior to the founding to Suntech Power Holdings, Dr. Shi was a “research director and executive director of Pacific Solar Pty.,Ltd., an Australian  PV company engaged in the commercialization of next-generation thin film technology” (Suntech Power Holdings Co).  Dr. Shi received his “bachelor’s degree in optical science from Jilin University in China in 1983, a master’s degree in laser physics from the Shanghai Institute of Optics and Fine Mechanics, the Academy of Sciences in 1986, and a Ph.D. degree in electrical engineering from the University of New South Wales in Australia in 1992”(Suntech Power Holdings Co). With his extraordinary level of education, Dr. Shi patented 11 PV technologies and published several articles and papers in PV-related scientific magazines and at conferences. (Suntech Power Holdings Co).

Dr. Shi works effortlessly to improve and promote clean and renewable energy. According to Australian Greens Senator Christine Milne, Dr. Shi donated funds to University of NSW, Australia “because he felt it was not getting an appropriate level of government support” (“‘Climate of fear’ in solar research” 3). His continuousness efforts to create green jobs supports ongoing transition to renewable energy sources and maintains human labor forces to demonstrate his social entrepreneurs’ virtue (Suntech).  Dr. Shi was selected and named one of TIME magazine’s 2007 “Heroes of the Environment” as well as awarded the 2007 Corporate Citizen of the Year award at the China Business Leaders Award for his outstanding contribution to the development of the solar industry (“News Headlines”).

Dr. Shi’s commitments to improve clean and renewable energy encouraged and motivated others to do the same. His success was not due to lucky, but rather through endless efforts and struggles that he was able to build his company up.  Dr. Shi brought secondhand equipment and manufacturing gears from bankrupt U.S. company Astrosolar and used low-wage workers in China to produce his equipment, while Japan and Germany would handed off to a robot (Flannery).  His efforts to keep jobs within the country help local communities and the country itself. Dr. Shi remained modest and practices a democratic management style even after his raise to richness, but like most CEO’s, Dr. Shi brought in professionals to help him run and expand the company. Dr. Shi brought in David Hogg as COO, David W. King as CFO, Stuart R. Wenham as CTO, Auto Yau as CIO, and many more to help him build and expand his company (Hoovers).  

III. Customer and Competition

Suntech Power Holdings is the world’s largest crystalline silicon photovoltaic module manufacturer. It competes in a world market and focus mainly on expanding its business. Like any other corporations and businesses, Suntech Power Holdings has competitors. Suntech Power Holdings has been greatly impacted by the decreased in government subsidies for green energy that resulted in a decline in the demand of solar panel. Despite this setback for their 2012 projection, Suntech Power Holdings maintain an ideology of producing a more efficient and cheap solar panel with a collaborative project with VSAF to ensure their advantages over their competitors.

 
Suntech Power Holdings Company is a solar energy company that focuses mainly on the production of photovoltaic products, which include building-integrated photovoltaic products. Suntech Power Holdings does not limit itself with only the production of photovoltaic products, but also provides “engineering, procurement and construction services to building solar power systems using its own solar modules” (“Suntech Power Holdings”). It also provides electric power to residential, commercial, industrial, and public area locally as well as in an international market. Their photovoltaic services extend from China all the way to the United States, while expanding into the “development of utility scale solar power systems” (“Suntech Power Holdings).

Due to a strong world demand for solar panels, Suntech Power Holdings is able to expand its company to the European and Americas Market for solar panel. As it is now, Europe remains the top consumers of solar panel (“2010 Corporate Report” 10). Suntech Power Holdings is planning to expand and export their products to Americas and APMEA as their next major adopters of solar technology. Due to Suntech Power Holdings’ regional headquarters in Schaffhausen, Switzerland and offices across Europe, they were able to provide a much needed service to European customers, mostly adults of ages 18 or older. Within Europe, Germany continues to generate the most demand for solar panels. Italy is emerging as the second country in Europe to increase their demand of solar panels due to a “generous subsidy program” (“2010 Corporate Report” 12). France, Benelux, and Greece are expected to a very prominent market for solar panel and photovoltaic products. The United Kingdom and Bulgaria are expected to be a healthy base for solar installations that will diversify the European solar landscape (“2010 Corporate Report” 12).

In 2010, Suntech Power Holdings became the number one supplier of solar panels in the Americas, but due to a supplies shortage, they were only able to provide about 150 dealers out of 400 dealers of the solar panels (“2010 Corporate Report” 13). These supplies shortage encourages Suntech to expand and build regional headquarter in United States. They developed a base in Arizona and Southern California to try to strongly establish their footing in the United States, hoping that the U.S. market will help them influence the Canadian and Latin America market in the near future. Suntech Power Holdings hopes that as photovoltaic products become cheaper, they can expand their business to the Asia Pacific, Middle East and Africa (APMEA) market, with Japan leading the way (“2010 Corporate Report” 14). 

Suntech Power Holdings, like any other business, has competitors. Among their many competitors, only two are notable. First Solar and Sharp are the most notable competitors against Suntech Power Holdings. In 2010, First Solar was responsible for 8.40% of the world PV Module and Sharp was responsible for 6.80%, while Suntech was responsible for 8.10% of the world PV Module (“Top PV Module”). In 2011, Suntech Power Holdings overwhelmed over its top competitor, First Solar, by ranking first worldwide for photovoltaic module shipment. Although Suntech Power Holdings is ranked first worldwide for production output over their top competitor, First Solar, they do not let their guard down as they still seek to improve their solar cell by improving efficient and the cost of producing the solar cell. With this competitive ideology of never backing down or letting their guard down, Suntech Power Holdings continues to secure their world position as the number one producer of PV module.  

IV. Information Technology

Suntech Power Holdings is a 21st century company that takes advantage of the available technologies. It created a website that allows consumers to access the many different products and information available for their company. Since Suntech Power Holdings is a globalized company, its website is designed to meet the needs of each country. They design their website to be user friendly, allowing for easy access to information and products that they have to offer. The internet and e-commerce have been one of the deciding factors for Suntech Power Holdings’ global expansion. Through the site, Suntech Power Holdings recruits qualified dealers for each country. It saves the company time and capital as it delivers service 24/7.  

Suntech Power Holdings is a globalized company that provides service both domestically and internationally. In order to efficiently provide the same information to all the targeted countries, Suntech Power Holdings created a website. When entering their website, the first noticeable information that the consumer is shown is the country option of the website. Depending on the country you choose, you receive different types of information relating to the regional development of the country and the company. The website provides information that is relevant to each country. They made it so that the consumers are not overloaded with information that does not concern them. After entering the website and choosing the region/country in which you are from, you enter the site for that specific country.

When you enter the company website for your country, you notice that the website is designed to be user friendly. They have four categories for the consumers to choose from; “About”, “Technology”, “Products and Services”, and “Contact”.  This makes navigating through the website much easier. Under “Products and Services”, consumers are linked to partner sites from which they can order the products. In addition, they give information where to obtain the products domestically and internationally. They can ship the products to any specific location they want it to go. If the consumers have any questions regarding the products or service, they can contact Suntech Power Holdings domestic headquarters or international headquarters. In addition, they provide to third party website that will help the consumers better understand the products and service that is provided by the company.

Unlike most companies’ website, Suntech Power Holdings is constantly updating consumers with related company information such as government’s policies, improvement in technologies, etc. Beside the Suntech News, Suntech Power Holdings posts videos on the effects that their technologies have on the environment and the society. On their website, the company offers career opportunities for consumers under “About” section of the site.

The internet part of IT is a great part of Suntech Power Holdings’ global and domestic expansion. It allows for consumers to access information, products, and service online. It also allows worker to work from home and provide contact information to the consumers anytime from anywhere. Suntech Power Holdings is a 21st century company that depends on the technology of internet to expand their business and obtain information from it. Without the internet they cannot provide the necessary information to consumers around the world. Internet is very important to the future success of Suntech Power Holdings. 

V. Global Activities 

Suntech Power Holdings is an international company that provides service and products to residential, commercial, industrial, and public area locally and internationally. Suntech Power Holdings has many headquarter across the world, which depends upon how marketable the country is and how much potential revenue it can generate from the demand of green technology as well as how much government incentive the consumers received.  Suntech Power Holdings focuses mainly on global expansion rather than domestic expansion. 

According to Suntech Power Holdings’ 2011 second quarter earnings call, most their revenue generated from sales are from Europe.  In their first quarter earnings call, 18% of the revenue came from Americas, 30% of the revenue came from the rest of the World, and Europe generate a grand amount of 52% of the revenue. In Suntech Power Holdings’ 2011 second quarter earnings call and 2011 expected earnings call, Europe accounted for 53% of the Suntech Power Holdings’ revenue for those months, while Americas accounted for 21% in second quarter earnings call and 22% in 2011expected earnings call; the rest of the world accounted for 26% in 2Q/11 and 25% in 2011E. In the 2011 E Market, Europe is expected to account for 63% of Suntech Power Holdings’ sales, Americas is expected to account for 15% of the sales, and the rest of the world is expected to account for the remaining 22% (2Q/11 Earnings Call).  According these statistics, most of Suntech’s 2011 revenue distribution of 831 million comes from Europe with an unadjusted gross margin of 4.1%. The decrease in revenue percentage generate by the Americas in 2011E Market might be due to less government supports on clean energy as Republican s want to cut federal spending on green movement.

Suntech Power Holdings has headquarters in North America, South America, Europe, Middle East, and Asia. Suntech Power Holdings has offices in “13 countries, including regional headquarters in San Francisco, California; Schaffhausen, Switzerland; and Wuxi, China” (Suntech). They determine whether to set up headquarters in a certain regional based upon the country demand for solar energy. This is one the reason why most of Suntech Power Holdings resources are concentrated in Europe, especially in Germany, where the demand for green energy is supports by both the consumers and government party. According to Suntech Power Holdings’ 2011 first quarter earnings call, 250,000 Germans protested against nuclear energy and Germany Green Party won in Braden-Wurthenburg state (1Q/11 Earning). This helps explain the high percent sales in Europe, especially in Germany.

Due to a strong world demand for solar panels, Suntech Power Holdings is able to expand its company to the European and Americas Market for solar panel. As it is now, Europe remains the top consumers of solar panel (“2010 Corporate Report” 10). Suntech Power Holdings is planning to expand and export their products to Americas and APMEA as there next major adopters of solar technology. Due to Suntech Power Holdings’ regional headquarters in Schaffhausen, Switzerland and offices across Europe, they were able to provide a much needed service to European customers, mostly adults of ages 18 or older. Within Europe, Germany continues to generate the most demand for solar panels. Italy is emerging as the second country in Europe to increase their demand of solar panels due to a “generous subsidy program” (“2010 Corporate Report” 12). France, Benelux, and Greece are expected to a very prominent market for solar panel and photovoltaic products. The United Kingdom and Bulgaria are expected to be a healthy base for solar installations that will diversify the European solar landscape (“2010 Corporate Report” 12). In 2010, Suntech Power Holdings became the number one supplier of solar panels in Americas, but due to a supplies shortage, they were only able to provide about 150 dealers out of 400 dealers of the solar panels (“2010 Corporate Report” 13).

Suntech Power Holdings launched as a global company due to the lack of demand from China for clean energy during the time. Not only does China lack demand for clean energy during the globalization of Suntech Power Holdings, Europe has a great demand for solar panels. In order to survive, Suntech Power Holdings markets more of their products and services to Europe. This move is great business as seen through Suntech Power Holdings’ revenue distribution against the market.  

VI. Ethics and Social Responsibility

Suntech Power Holdings is currently in an alleged case of fraud. The fraud case involves Suntech Power Holdings’ recent charity event. The case started with a whistleblower from Suntech subsidiary. Luo Fanhua, a former executive of Suntech subsidiary accused Suntech Power Holdings of “collecting a receipt from the China Charity Federation without delivery of the promised donation of goods worth 15 million yuan” (“Internal disputes lead” 1). Charitable donations are encouraged by the government through an incentive that “regulations state companies that donate money or goods to charitable funds can enjoy tax cuts” (“Charity says it” 1). Luo Fanhua stated that Suntech Power Holdings was supported to donate solar energy systems to “schools across the country as prizes in a competition to reward innovation among young people” (“internal disputes lead”1). This is organized by the Chinese Society of Education and the Copyright Society of China. This internal dispute was brought to public eyes when Luo accused Suntech Power Holdings of fraud against the government. Luo told the press that Suntech Power Holdings is “using the donation” and “listed under company costs, to save at least 2 million yuan in income tax” (“Internal disputes lead” 1).

Yang Zhiping, a spokeman for Suntech Power Holdings, rebuts Luo’s accusation by stating that “the system would not be delievered to schools until November, as has been the practice in the past” (“Internal disputes lead” 1). To help ease the tension and bad publicity, Suntech Power Holdings delivered the “first batch of solar energy…to 13 schools in Xingyang, Hubei province” on July 24 (“Charity says it”1). The second batch was sent on August 10 with the third and fourth batches on their way to the schools (“Charity says it” 1).

Despite this accusation made by Luo Fanhua, Suntech Power Holdings has never had any legal trouble with the government. In May 8, 2009, they submitted Form 20-F to the United States Securities and Exchange Commission. Suntech Power Holdings has never had unresolved staffs’ complaint (U.S.S.E.C. 48). According to Suntech Power Holdings’ Form 20-F of May8 2009, they will “provide to any person without charge, a copy of [their] code of business conduct and ethics within ten working days after [they] receive such person’s written request” (U.S.S.E.C. 101).   Suntech Power Holdings is regulated by the U.S. Securities and Exchange Commission. They are required to submit a 6-K report, which has to have their second quarter results for that year, operating income and margin, net income and earnings per ADS, their business outlook for the future. This reports can be obtained through either the U.S. Securities and Exchange Commission or Suntech Power Holdings’ website.

Suntech Power Holdings is recently recognized as a “bold global environment” contributor. They received the “Boldness in Business Environment Award” in 2009 Environment Award sponsored by Financial Times and Arceloer Mittal (“Suntech recognized for”).  The award is given to entrepreneurs that show “leadership in six categories,” “Drivers of Change, Corporate Responsibility, Entrepreneurship, Newcomer, Emerging Markets, and Environment” (“Suntech recognized for”).  Companies that have given this award have made great contribution to improving the environment and are model leader in their respective fields. This award is proof that Suntech takes social and ethical responsibility for their company. 

VII. Human Resources 

Suntech Power Holdings’ Human Resource Department  is responsible for recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organizational goals (Daniels).  Organizational goals include career management, employee-union relations, training development, motivation, evaluation, compensation and benefits, and etc. The Human Resource Department  manages their human resources through a human resource planning process which is preparing a human resource inventory of the organization’s employees, preparing a job analysis, assessing future human resource demand, assessing future labor supply, and establishing a strategic plan (Ettl 258-259). They manage and hire from internal source through transfer and promotions and from external sources through applications.  

Suntech Power Holdings employs different levels of employees of professional and labor backgrounds. They employ financial officers, operating officers, technology officers, human resources officers, research scientists, general counsels, and laborers.  From 2009 to 2010, Suntech Power Holdings has 61.23% employee growth (Daniels). Suntech Power Holdings employ 9,070 employees as of December 31, 2008, 12, 548 employees as of December 31, 2009, and 20,231 employees as of December 31, 2010 (United States Securities).

Within the 20,231 employees employed by Suntech Power Holdings, 81.8% (16, 546) work for manufacturing and engineering, 5.1% (1,033) work for quality assurance, 3.4% (685) work for general and administration, 4.5%(913) work for purchasing and logistics, 2.2%(450) work for research and development, 1.5%(298) work for  marketing and sales, and 1.5%(306) work as laborers (United States Securities).

As of December 31, 2010, Suntech Power Holdings employs close to 1,650 employees with a bachelor’s or higher degrees and all of their “manufacturing line employees have post-high school technical degrees or high school diplomas” (United States Securities). With an increase in the recruitment of qualified personnel through Human Resource Department, Suntech Power Holdings is able to continue in their successful oversea expansion. Suntech Power Holdings’ 61.23% employee growth from 2009 to 2010 clearly demonstrates their advancement as a company.

Suntech Power Holdings’ success depends on their ability to “attract, retain, and motivate qualified personnel” (United State Securities). They provide different incentives to employees to further their future success. Suntech Power Holdings offer employees additional annual merit-based bonuses on the overall performance of the company as a whole, the employee’s department and the employee’s individual contributions. Percentages of employees’ aggregate salary are contributed to their employee benefit plans. The employee benefit plans take “20%, 8%, 12%, 1.5%, 0.6% and 0.9%” of the employees’ annual salary to a “pension contribution plan, a medical insurance plan, a housing fund, an unemployment insurance plan, a personal injury insurance plan and a maternity insurance plan, respectively” (United States Securities). Suntech Power Holdings contributed $5.2 million in 2008, $5.3 million in 2009, and $22.5 million in 2010 to their employee benefit plans. 

VIII. Operations

Suntech Power Holdings produces and provides products and service. They operate and manage their business as a single segment. Suntech Power Holdings predicts their future success depends on their ability to manage their production facilities effectively, “to continue improving their production conversion efficiency, and to reduce their manufacturing costs” (United States Securities 57). They also believe that capacity utilization is a key factor in increasing their revenues and profits which was seen through their current manufacturing lines. Their manufacturing lines operated at “utilization rates consistently exceeding their design capacities for the most part of 2010” and therefore attained highly competitive manufacturing processing cost (United States Securities 57). Suntech Power Holdings continues to expand their capacity, which contributed to increases in sales of Photovoltaic (PV) products. They expanded their Shanghai plant PV cell capacity to 1,800 megawatt (MW) at the end of 2010 and plan to increase their total cell capacity to 2,400 MW by the end of 2011. They also plan to continue ramping up the capacity of Rietech, a subsidiary of Suntech Power Holdings, from 500 MW at the end of 2010 to 1,200 MW by the end of 2011. They plan to use Pluto technology to increase the capacity of the PV cell.

David Hogg, chief operating officer of Suntech Power Holdings, is responsible for maintaining and increasing the productions of Photovoltaic cells, while keeping the production costs to the minimum (Daniels). In order to keep the operating costs at the minimum, Suntech Power Holdings invests $15.3 million, $29.0 million and $40.2 million in 2008, 2009, and 2010 respectively in research and development (United States Securities 75). The increase in the expenses of research and development is mainly due to the increases in raw material costs related to research and development activities. Suntech Power Holdings research and development is currently employ over “450 personnel, including 264 PV technology experts from China and abroad” (United States Securities 81). These personnel work on developing improved encapsulation technologies, enhancing production processes to reduce silicon usage per watt, strengthening material science research and development to better utilize low cost solar grade silicon, diversifying product offering, and improving Pluto technology.  Pluto technology is used to produce higher conversion efficiencies PV cells. The results of these investments is achieving “conversion efficiency rates in the range of 18.8% to 19.1% on PV cell manufactured with monocrystalline silicon wafers and 16.6% to 17.5% on PV cells manufactured with multicrystalline silicon wafers” (United States Securities 81).  Pluto technology has played a huge role for Suntech Power Holdings in maintaining their competitive advantage over their competitors. Pluto technology is a new generation technology that increases the efficiencies to “20-21% for monocrystalline silicon and 17.5-18.5% for multicrystalline silicon” (United States Securities 81).  

Suntech Power Holdings has run into many challenges that limit their productions capability especially the price of raw materials. Price increase in polysilicon and silicon wafers for research and department have increased Suntech Power Holdings’ investment in research and department. After the financial crisis, the demand for solar products revived with a decline in the supply of polysilicon and silicon.  Polysilicon and silicon wafers are Suntech Power Holdings key input material of production. Suntech Power Holdings expects the “demand imbalance related price increase; spot prices of both monocrystalline and multicrystalline silicon wafers will continue to fall in the long run” (United States Securities 57). Suntech Power Holdings spend $57.3 million on raw materials in 2009 and $220.9 million on raw materials in 2010 (United States Securities 138). 

Suntech Power Holdings does not provide the percentage for their domestic and international sales, but rather they provide revenues from each country and region. Suntech Power Holdings have manufacturing and operational facilities in Germany, Spain, Italy, France, China, South Africa, USA, Japan, and regional areas in Middle East, South East Asia, and Europe (United States Securities 164).

From the net revenue of each country, we can estimate the percentage of domestic and international production of Suntech Power Holdings. We can estimate that around 5% of Suntech Power Holdings products are produced domestically, while the other 95% is produced internationally. 

IX. Marketing 

Suntech Power Holdings is less dependent on their marketing than other companies in different fields. Suntech Power Holdings often employs independent contractors to support their marketing activities as well as allow partners and subsidiaries to advertise their products (United States Securities 90). Suntech Power Holdings employs 450 employees in their marketing and sales department. Their main marketing strategy is building regional headquarters and hiring local sales personnel to further develop key relationships and support for the targeted markets (United States Securities 12). Suntech Power Holdings’ revenue is mainly composed of product sales to other businesses and to the governments. 

Suntech Power Holdings produce PV cells that are more energy efficient and can carry a larger capacity in comparison to their competitors. They sell their products worldwide in key solar energy markets including Germany, Italy, Spain, France, Benelux, Greece, the United States, Canada, China, the Middle East, Australia and Japan (United States Securities 37). Suntech Power Holdings sells and advertises their products primarily through distributors, system integrators, and project developers. 

Suntech Power Holdings’ marketing development advertises their products differently for each country. They gather data and trends of each country and the country’s government before initiating their marketing campaign. Their marketing campaign includes the uses of local sale employees, the company’s website, video, and partners and subsidiaries. The cost efficiency of online advertising has encouraged Suntech Power Holdings to focus their offline advertisements on driving the customers to their websites. Their marketing strategies are based around the concept of energy efficiency marketing.  

Suntech Power Holdings chooses what type of advertisements are produced based upon the consumers’ income level and educational background. Suntech Power Holdings main consumers are consumers with higher household incomes of more than $75,000 and/or high educational attainment. Consumers of age 25 or younger with household incomes less than $50,000 are less likely to be informed of government incentive programs to subsidize energy efficient products (“Attitudes Toward Energy”). Suntech Power Holdings advertises their products differently to each group. Suntech Power Holdings’ advertisements for the group with a higher income and/or educational background are more energy efficient products with high price premiums or high initiate costs.

Suntech Power Holdings bases their advertising campaign on the race of the consumers. According to “Green Marketing-US- April 2011,” Asian consumers tend to shop greener than others groups, while Hispanics are more committed to ethical shopping and “are more likely than other groups to learn about companies’ environment records from advertising” (“Green Marketing”). African-Americans are less interested in paying a premium for energy efficient products (“Attitudes Toward Energy”).

Source: “Suntech Power Holdings”- Quantcast

X. Finance

Despite suffering from ongoing government budget cut, Suntech Power Holdings continues to perform well. Recent government budget cuts on clean energy spending have caused a decrease in the demand for solar panels and driven the solar panel market price down. Reduction in government incentive programs discourages consumers’ spending on solar panels. Suntech  like other solar panel companies have suffered price drops in their stocks. Despite outperforming their competitors in the third quarter, with a 15% increase in shipments from the second quarter and with a gross margin of 13%, their overall stock fell 68% this year (Goosens 2). Suntech Power Holdings stock dropped 6.1 percent to $2.60 on November 10. With continuous budget cuts, Suntech is not expected to sustain their performance for the fourth quarter. In the upcoming year, they are expecting to reduce operating cost by at least 20% and improving working capital by $200 million (Goosens 2). They expect the solar panel market to bounce right back in the upcoming year.

Suntech Power Holdings starts their fiscal year on the first of January and ends on the 31st of December of each year. Suntech operates on costs close to their total revenue. In 2010, Suntech Power Holdings operated on total operating expenses of $2.7047 Billion and yields a total revenue of $2.9019 Billion (Suntech Power Holdings). In 2010, Suntech Power Holdings has a total equity of $1.8677 Billion and total liabilities of $865.3 million. Suntech Power Holdings’ total liabilities and equity increased from $2.5352 Billion to $2.7330 Billion from 2009 to 2010, respectively. In addition, their total assets increased from $2.5352 Billion to $2.7330 Billion from 2009 to 2010, respectively (United States Securities 165). Suntech Power Holdings has a current debt to equity ratio of 1.47 (Capital IQ). They have a high debt to equity ratio and are a risk factor for current and future investors. A debt to equity ratio above 1 shows that the company is in a risky situation. Despite the high risk, Suntech Power Holdings has a current profit margin of 4.81% with an operating margin of 8.00% and 3.65% and 8.00% of return on assets and return on equity, respectively (Capital IQ).  

Suntech Power Holdings has their books audited by Deloitte Touche Tohmatsu CPA Ltd. Suntech Power Holdings paid Deloitte Touche Tohmatsuu CPA Ltd. $3.0610 million, $2.2500 million, and $2.6200 million in 2008, 2009 and 2010, respectively (United States Security 112).

Suntech Power Holdings is a fiscally conservative firm. They tried to reduce the cost of their raw materials. They planned to reduce operating expense by at least 20% by next year and improve working capital by $200 million.  They assessed risk factors for the company and implements counter measures for them. 

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