Shenzhen Topray Solar announced its IPO prospectus today. The company, a "high-tech enterprise engaged in the R&D, production and sales of amorphous silicon, monocrystakline [sic] silicon, polycrystalline silicon solar cell chips, solar cell modules and other cell application products", will offer 40 million A shares equal to 25 percent of its enlarged stock capital. The company's press release claims it "has become the biggest manufacturer of amorphous silicon solar cells in China and the lead exporter of such products" in 2004, 2005, and 2006. A quick search through the Greentech Media - Prometheus Institute thin film report confirms Shenzhen Topray is China's largest a-Si producer, pumping a-Si cells out at 20 MW/year (though with flat projections until 2010). But, given the beating that solar stocks have been taking, I decided to do a little digging. I turned up a paper published by Arne Jacobson and Daniel Kammen, of Humboldt State University and Berkeley, on the quality of imported solar cells in Kenya. Perhaps unsurprisingly, Jacobson and Kammen found the "average stabilized performance for both lines of Shenzhen Topray a-Si modules was approximately 6 watts, which is well below the acceptable levels for 14 Watt rated modules." Shenzhen Topray marketed their a-Si modules as performing at 14 Watts. Apparently, the "low performance of these modules may be caused by impurities introduced during production," which lead to "delamination of the active material of the a-Si modules." As a result of Jacobson and Kammen's paper, Kenital and Electric Link - the two major solar cell importers in Kenya - suspended imports and discontinued sales of Shenzhen Topray's products. So what gives? On the one hand, an IPO during a near-recession sends the signal that this company has come prepared to kick ass and take names. Perhaps bolstered by their position as China's leading a-Si producer/exporter, Shenzhen Topray thinks they can rise through the muck and pull off a big first quarter offering. On the other hand, quality problems like those documented in Kenya, in addition to competition from Sharp, SCHOTT, and Ersol (among others) in the a-Si market, most likely do not bode well for a company whose panels suffer from incontinence. Taking a global view, the failure to renew the ITC, in addition to feed-in tariff reductions in Germany and Spain by the end of 2008, will most likely bring down demand for thin film by the end of the year. This would be magnified by more poly coming online, which would be a factor leading to reduced prices for silicon modules, bringing greater competition to low-cost (but low efficiency) a-Si. It seems the cons outweigh the pros, and maybe Shenzhen Topray should hold off until they fix some of their leakage problems or until public money starts flowing into the Chinese solar sector at the rate it did a year ago. Waiting for either of those things might take us long past the first quarter. We'll keep the light on for you.