WITH its market value slumping, the world’s biggest photovoltaic manufacturer is moving to go private, the second solar company this year and probably not the last.

    Trina Solar Ltd. announced a buyout bid Tuesday from founder Gao Jifan that offers shareholders a 21.5 percent premium. JA Solar Holdings Co., the fifth-largest panel maker, received a similar offer in June.

    The moves show the frustration of a solar industry dominated by Chinese companies that have seen shares underperform U.S. peers even with rising profits and sky-high growth forecasts.

    China’s solar entrepreneurs, after raising billions selling shares on Wall Street, may be deciding the best course now is a strategic retreat, taking the companies private while stocks are cheap.

    “I wouldn’t be surprised to see further scenarios” like the Trina and JA Solar buyouts, said Angelo Zino, a New York-based analyst at S&P Capital IQ. “The market isn’t properly valuing these securities.”

    Solar shares slumped in 2012 and 2013 amid a global glut of panel supplies that eroded profits. They haven’t recovered even though industry earnings and installations have hit new records this year.

    Trina’s U.S.-listed American depositary receipts (ADRs) have been sliding for the past two years even as the company reported a string of profitable quarters. They slipped almost 28 percent from April through Dec. 11, the day before Gao submitted his offer to the company.

    The offer “reflects the company’s frustration of being undervalued despite its growth prospects,” Patrick Jobin, an analyst with Credit Suisse Group AG, said in a research note. He said Gao owns 5.9 percent of Trina, as of the end of March.

    Gao and a group backed by a unit of Shanghai-listed Industrial Bank Co. offered US$11.60 per ADR for the outstanding stock they don’t already own, 21.5 percent above the Dec. 11 closing price. The company has formed a committee to examine the offer, which would value the company at US$1.07 billion based on 92.2 million ADRs outstanding.

    “Gao may be considering the benefit to Trina’s business if it no longer needs to please investors on a quarterly reporting cycle,” said Jenny Chase, head of solar analysis at Bloomberg New Energy Finance. The company’s market position means it hardly needs the increased brand transparency and exposure that comes with listing, she said.

    Plunging oil prices have been a drag on the solar industry, sapping investor confidence in renewable energy even though the fuels typically don’t directly compete.

    Solar share prices are “linked to the oil price,” said Angelica Jarvenpaa, an analyst Raymond James Financial Inc. “It’s unfair and it has nothing to do with the fundamentals” of solar companies.

    That’s helping make solar companies attractive to potential buyout offers.

    JA Solar received a buyout bid June 5 from chief executive officer Jin Baofang, who offered to pay a 20 percent premium.

    Trina and JA are part of a broader trend that’s also seen Chinese technology firms considering an exit from the U.S. stock market.

    More than a dozen Chinese companies traded in the United States have received delisting bids this year. In some cases, the businesses have looked to relist back home, where returns have been higher than in the United States.

    “I think that people are looking at the disconnect in valuations on the Chinese mainland versus the United States and the ease of capital-raising there versus here,” said Jeffrey Osborne, a Cowen & Co. analyst.

    (SD-Agencies)