August 21, 2009

Company Report
Analysis of Sales/Earnings

Suntech Power Holdings STP: $15.79

Co., Ltd. Greentech
Sell Price Target: $7.00
STP 2Q Results: Looking For Earnings Leverage,
But Coming Up Short Colin Rusch
212-468-7015, crusch@thinkequity.com
THINK ACTION:
The top line came in slightly below consensus. EPS of $0.06 was above Changes Current Previous
consensus of $0.01, driven by a $17.5M Forex gain ($0.10 in EPS). We Rating Sell --
continue to see limited earning's leverage in STP's business model and believe Price Target $7.00 $8.00
2Q results highlight this difficulty, as OpEx was 12.0% of revenue, net interest FY09E EPS $0.18E $0.41E
expense was 7.6% of revenue, and GM was 18.5%. We maintain our Sell FY10E EPS $0.44E $0.53E
rating and adjust our price target to $7 (from $8) based on 16x our 2010 EPS FY09E REV (M) $1,623.0E $1,383.9E
estimate of $0.44 (from $0.53). FY10E REV (M) $1,878.0E $1,719.6E
KEY POINTS: 52-Week High: $48.64
Conclusion: We believe that STP's 2Q09 results are indicative of the 52-Week Low: $5.09
strengths and weaknesses of STP's business model. It has built a strong Shares O/S-Diluted (M): 180.7
reputation, which allows the company to sell at a premium in certain areas; Market Cap (M): $2,853.3
however, the company's gross margin structure, cost of capital, and growing Average Daily Volume: 7,826,418
sales expense limit earnings upside, in our opinion. We believe results this Short Interest: 8.0%
quarter, in addition to guidance, are indicative of how STP will be approaching Debt/Total Cap: 51.5%
the market in the future. We believe the company will have a difficult time Net Cash Per Share: ($4.93)
competing on a cost basis, and is now making efforts to preserve price and P/E (12-month forward): 59.9x
margin. We believe that STP faces an uphill battle on earnings as Est. Long-Term EPS Growth: NA
demonstrated by basic operating measures (for 2Q09, OpEx was 12.0% of P/E/G: NM
revenue, net interest expense was 7.6% of revenue, and GM was 18.5%). The Fiscal Year-End: Dec
company has guided GM flat for the balance of the year, with OpEx up slightly REV (M) $ 2008A 2009E 2010E
on a percentage basis. We believe the company will have to significantly Mar 434.5A 315.7A NA
improve gross margin or reduce interest expense to demonstrate earnings Jun 480.2A 321.0A NA
power. As neither option appears readily on the horizon, we maintain our Sell Sep 594.4A 530.3E NA
rating and adjust our price target to $7 (from $8). Dec 414.4A 456.0E NA
FY 1923.5A 1623.0E 1878.0E
What happened? STP reported 2Q09 revenue of $321M, above our estimate CY NA NA NA
of $300M, but below the consensus of $343M. GAAP EPS were $0.06, below
FY P/S 1.5x 1.8x 1.5x
our projection of $0.08, but above the consensus of $0.02. Gross margin was
18.6%, versus our estimate of 19.9% and consensus at 17.6%. ASP declined CY P/S 1.5x 1.8x 1.5x
approximately 8% in the quarter. EPS $ 2008A 2009E 2010E
Mar 0.33A 0.01A NA
How was guidance? STP guided 3Q09 shipments to an approximate 50% Jun 0.38A 0.06A NA
increase over 2Q09, but lowered FY2009 guidance to 600MW (from Sep 0.33A 0.07E NA
600-700MW). Additionally, the company expects gross margins for 3Q09 to Dec (0.42) A 0.04E NA
remain relatively flat from the previous quarter. FY 0.66A 0.18E 0.44E
CY NA NA NA
New estimates: We increase our 3Q09 revenue estimate to $530M (from FY P/E 23.9x 87.7x 35.9x
$350M), but lower our GAAP EPS estimate to $0.07 (from $0.13). We now CY P/E 23.9x 87.7x 35.9x
estimate 2009 revenue of $1,623M (from $1,384M) with GAAP EPS of $0.18
(from $0.41) based on our estimate for 625MW in sales (from 565MW). Our
new 2010 revenue estimate is $1,878M (from $1,720M) with our sales estimate
remaining at 850MW. Our revised GAAP EPS estimate is $0.44 (from $0.53).

Please see analyst certification (Reg. AC) and other important disclosures on pages 4-5 of this report.
 August 21, 2009
Company Report
Analysis of Sales/Earnings

VALUATION:
Our $7 price target is based on 16x our 2010 EPS estimate of $0.44 (from $0.53).

RISKS TO PRICE TARGET:

Risks include but are not limited to: 1) macroeconomic conditions, 2) financing requirements, 3) customer financing
requirements, 4) supply constraints, 5) customer concentration, 6) increased competition, 7) reliance on government
subsidies, and 8) F/X exposure.

COMPANY DESCRIPTION:
Suntech Power is one of the largest manufacturers of solar cells and modules worldwide and the largest in China. In
addition to producing cells and modules, Suntech produces building-integrated ("BIPV") products and offers solar system
integration services in China.

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Suntech Power (STP) Colin Rusch
Income Statement ThinkEquity LLC
Last Reported Quarter: 06/30/2009 (212) 468-7015
Last ThinkEquity LLC Update: 08/20/2009 crusch@thinkequity.com
2008A 2009E
FY End: December FY FY MAR JUN SEP DEC FY MAR JUN SEP DEC FY FY
(in $M, except per share data) 2006A 2007A 1QA 2QA 3QA 4QA 2008A 1QA 2QA 3QE 4QE 2009E 2010E

Total Revenues $598.9 $1,348.3 $434.5 $480.2 $594.4 $414.4 $1,923.5 $315.7 $321.0 $530.3 $456.0 $1,623.0 $1,878.0

Cost of Revenues 450.0 1,074.2 338.1 364.4 466.1 412.1 1,580.6 259.4 261.3 432.2 371.7 1,324.5 1,518.2

Gross Profit 148.9 274.1 96.4 115.8 128.3 2.3 342.9 56.3 59.7 98.1 84.4 298.5 359.8

Selling Expenses 9.0 30.6 15.3 14.8 14.8 14.5 59.3 11.4 11.5 10.6 9.1 42.6 37.6
General and Administrative 28.3 56.9 16.5 20.3 21.8 27.1 85.7 18.8 22.8 54.0 45.9 141.5 180.0
Research & Development 8.4 15.0 2.8 3.3 4.7 4.5 15.3 4.9 4.3 4.3 4.3 17.8 17.2
Other - - - - - - - - - - - - -
Total Operating Expenses 45.7 102.5 34.6 38.4 41.3 46.2 160.4 35.1 38.6 68.9 59.3 202.0 234.8

Operating Income 103.2 171.6 61.8 77.4 87.1 (43.8) 182.5 21.1 21.1 29.2 25.1 96.5 125.0

Interest Expense (6.3) (24.0) (9.0) (13.9) (16.7) (18.0) (57.6) (26.7) (25.9) (25.0) (25.0) (102.6) (74.0)
Interest Income 11.8 31.2 5.0 8.7 8.8 10.1 32.6 5.1 1.6 7.6 5.7 20.0 30.5
Other Income (expense), net 2.1 3.7 2.1 (3.8) (19.8) (22.9) (44.4) 6.4 15.0 2.0 2.0 25.4 9.0
Total Other Inc (Exp), net 7.5 10.9 (1.9) (9.0) (27.6) (30.9) (69.4) (15.3) (9.3) (15.4) (17.3) (57.3) (34.5)

Pretax Income 110.8 182.5 60.0 68.4 59.4 (74.7) 113.1 5.9 11.7 13.8 7.8 39.2 90.6

Income Tax Expense (Benefit) 7.2 13.2 5.5 3.5 3.7 (8.9) 3.8 (0.1) (0.2) 1.4 0.8 1.9 9.1
Minority Interest 1.4 2.7 1.3 0.4 0.1 (0.4) 1.4 (0.3) 0.4 - - 0.1 -
Equity Investments 1.0 (0.7) - - - 0.3 0.3 (3.9) (2.3) - - (6.2) -

GAAP Net Income $106.0 $171.3 $55.8 $65.2 $55.9 ($65.9) $111.0 $1.8 $10.0 $12.4 $7.0 $31.2 $81.5
GAAP Diluted EPS* $0.68 $1.02 $0.33 $0.38 $0.33 ($0.42) $0.66 $0.01 $0.06 $0.07 $0.04 $0.18 $0.44

Stock-based Compensation 13.8 27.9 4.8 6.1 4.4 5.8 21.0 5.0 4.2 7.5 7.5 24.2 30.0
Amortization of Intangibles - - - - - - - - - - - - -
Other - 1.8 - - - 17.7 17.7 - - - - - -
Income Tax Effect - - - - - - - - - - - - -

Pro Forma Net Income $119.8 $201.0 $60.6 $71.3 $60.3 ($42.4) $149.7 $6.8 $14.2 $19.9 $14.5 $55.4 $111.5
Pro Forma Diluted EPS* $0.77 $1.19 $0.35 $0.41 $0.35 ($0.27) $0.89 $0.04 $0.08 $0.11 $0.08 $0.32 $0.60

Diluted Shares Outstanding (M) 156.1 169.3 173.8 185.2 185.5 155.9 170.5 156.8 172.6 182.6 183.1 173.8 184.4

Revenue 100.0% 100% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Gross Margin 24.9% 20.3% 22.2% 24.1% 21.6% 0.6% 17.8% 17.8% 18.6% 18.5% 18.5% 18.4% 19.2%
Selling Expenses 1.5% 2.3% 3.5% 3.1% 2.5% 3.5% 3.1% 3.6% 3.6% 2.0% 2.0% 2.6% 2.0%
General & Administrative 4.7% 4.2% 3.8% 4.2% 3.7% 6.5% 4.5% 6.0% 7.1% 10.2% 10.1% 8.7% 9.6%
Research & Development 1.4% 1.1% 0.6% 0.7% 0.8% 1.1% 0.8% 1.6% 1.3% 0.8% 0.9% 1.1% 0.9%
Operating Margin 17.2% 12.7% 14.2% 16.1% 14.6% (10.6%) 9.5% 6.7% 6.6% 5.5% 5.5% 5.9% 6.7%
Other inc (exp) 1.3% 0.8% (0.4%) (1.9%) (4.6%) (7.4%) (3.6%) (4.8%) (2.9%) (2.9%) (3.8%) (3.5%) (1.8%)
Pretax Margin 18.5% 13.5% 13.8% 14.2% 10.0% (18.0%) 5.9% 1.9% 3.7% 2.6% 1.7% 2.4% 4.8%
Tax Rate 6.5% 7.3% 9.2% 5.1% 6.1% 11.9% 3.3% (1.3%) (1.4%) 10.0% 10.0% 4.9% 10.0%
Net Margin 17.7% 12.7% 12.8% 13.6% 9.4% (15.9%) 5.8% 0.6% 3.1% 2.3% 1.5% 1.9% 4.3%
Y/Y - Revenues 165.0% 125.1% 76.1% 51.3% 53.7% 4.2% 42.7% (27.4%) (33.2%) (10.8%) 10.0% (15.6%) 15.7%
- Net Income 246.1% 61.6% 115.4% 58.3% 5.0% NM (35.2%) (96.8%) (84.7%) (77.8%) NM (71.9%) 161.4%
- EPS 159.0% 50.5% 109.7% 50.5% 2.4% NM (35.3%) (96.6%) (84.9%) (79.5%) NM (72.9%) 146.4%

Q/Q - Revenues 9.3% 10.5% 23.8% (30.3%) (23.8%) 1.7% 65.2% (14.0%)
- Net Income 8.1% 16.9% (14.2%) NM NM 458.5% 24.4% (43.5%)
- EPS 10.8% 15.4% (13.2%) NM NM 407.3% 17.6% (43.6%)
Source: Company documents, ThinkEquity LLC estimates
* 2009 quarterly EPS does not equal annual EPS due to disproportionate percentage of earnings after capital raise in May 2009.

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 August 21, 2009
Company Report
Analysis of Sales/Earnings

Important Disclosures
Analyst Certification
I, Colin Rusch, hereby certify that all of the views expressed in this research report accurately reflect my personal views about the subject
securities and issuers. I also certify that no part of my compensation was, is, or will be directly or indirectly related to the specific
recommendations or views expressed in this research report.

The analyst(s) responsible for preparing this report has/have received compensation based on various factors, including the firm's total
revenues, a portion of which is generated by investment banking activities.

ThinkEquity LLC makes a market in Suntech Power Holdings Co., Ltd. securities; and/or associated persons may sell to or buy from
customers on a principal basis.

Rating and Price Target History for: Suntech Power Holdings Co., Ltd. (STP) as of 08-20-2009
11/21/06 01/16/07 06/12/07 07/16/07 08/10/07 11/14/07 12/10/07 02/21/08 02/17/09 05/29/09
B:$35.00 A:$40.00 A:$37.00 B:$52.00 B:$58.00 B:$90.00 B:$120.00 B:$85.00 S:$4.50 S:$8.00
100

80

60

40

20

0
Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q2
2007 2008 2009

Created by BlueMatrix

Rating Definitions
The ThinkEquity LLC rating system is based on a stock's expected total return over a 12-month investment horizon. Ratings on coverage
are defined as follows:

Buy: Appreciation potential of 20% or more over the next 12 months. Analyst has a high level of conviction that the company's business
fundamentals are intact and that the company will meet or exceed earnings projections. Valuation is considered reasonable considering
the company's potential.
Accumulate: Appreciation potential greater than 0% and less than 20% over the next 12 months. Typically good companies, with
fundamentals and earnings visibility intact, but current valuation limits upside potential.
Source of Funds: Stock is expected to decline as much as 20% over the next 12 months, due to a single or combination of factors
including excessive valuation, negative sector sentiment, and/ or reduced earnings expectations.
Sell: Stock expected to decline 20% or more over the next 12 months. Company fundamentals are deteriorating, leading to material
downward revisions in earnings projections and valuation.

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 August 21, 2009
Company Report
Analysis of Sales/Earnings

Distribution of Ratings, Firmwide

ThinkEquity LLC

IB Serv./Past 12 Mos.
Rating Count Percent Count Percent
BUY [B] 100 52.10 13 13.00
HOLD [Acc] 71 37.00 4 5.63
SELL [S/SoF] 21 11.00 0 0.00

This report does not purport to be a complete statement of all material facts related to any company, industry, or security mentioned. The
information provided, while not guaranteed as to accuracy or completeness, has been obtained from sources believed to be reliable. The
opinions expressed reflect our judgment at this time and are subject to change without notice and may or may not be updated. Past
performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or
implied, is made regarding future performance. This notice shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall
there be any sale of these securities in any state in which said offer, solicitation, or sale would be unlawful prior to registration or
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of ThinkEquity LLC.

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