However, its poly-silicon plant with the exit of Merrill Lynch (MER) is facing a capital crunch forcing the company to resort to dilution of its equity base. Also, the facility will not be operational before 2009, and will achieve full capacity only in 2010.

Until then, the company will have to depend upon its PV system installation business. This, along with a diminishing significance of fuel cells, increasing O&M (operations and maintenance) expenses leading to higher cost structure, earnings dilutive stock issuance and a strong competitive challenge in the alternative energy industry may present material risks to the company.

Therefore, we maintain our HOLD recommendation on HOKU common stock, with a six-month target price of $6.00. This represents 7.9% upside potential.

3SBio Initiated with a Buy Rating

3SBio, Inc. (SSRX) is a China-based biotech company focused on developing and marketing therapeutics for nephrology, oncology and cancer supportive care. The company's flagship product, EPIAO, is the number 1 brand in the EPO (erythropoietin) market. EPIAO is basically the generic version of Amgen's AMGN) Epogen.

The company's second lead product, TPIAO, has gained rapid physician acceptance for hrombocytopenia and is making a meaningful contribution to the company's top line growth. TPIAO was launched in Jan 2006 for the treatment of thrombocytopenia (deficiency of platelets) associated with chemotherapy in cancer patients with solid tumors.

A recent deal with US-based AMAG Pharmaceuticals (AMAG) will boost its expansion into the IV Iron market, which will sustain long-term growth for the company. We believe shares of 3SBio are undervalued, and we recommend investors to Buy at current levels, with a 6-to-12-month target price of $14.

Skechers a Hold in Current Climate

In July, Skechers (SKX) issued third-quarter guidance that was below consensus expectations. Macro risks have increased in the last two months, and economic conditions have worsened. These conditions are continuing to pressure consumer discretionary spending, and that is negatively affecting the footwear maker' results. Therefore, we are reducing our estimates for 2008 and 2009.

Longer term, the Manhattan Beach, California-based company's diverse portfolio of brands, international growth opportunities, and retail store expansion should bode well for its stock price. Still, its near-term upside will be limited until macro conditions show signs of improving. We maintain our Hold rating.

SKX shares are trading at 7.9x our 2008 EPS estimate and 6.8x our 2009 EPS estimate. This is a discount to its peer group, the S&P 500, and our estimate of its long-term earnings growth rate. But after the company s second quarter earnings miss, weak third quarter guidance, and our estimate reductions, we do not view the stock as particularly cheap. We expect SKX shares to be range bound until macro conditions improve.

Coca-Cola Hellenic Upped to Buy

Coca-Cola Hellenic Bottling Company (CCH) enjoys an attractive geographic mix with 66% of revenues being derived from developing or emerging markets. In addition, the company's product mix is less dependent on CSDs (carbonated soft drinks) than other bottlers.

Since the company conducts business and reports financial results in Euros, much of the stock's performance is inversely correlated with US dollar's exchange rate with the Euro. However, as management has a sound business strategy and proven execution skills, the recent earnings decline is providing a valuation-based buying opportunity. Therefore, the stock has been upgraded to a Buy.

Coca-Cola Hellenic Bottling Company is one of the largest bottlers of non-alcoholic beverages (soft drinks) in Europe, operating in 28 countries. In 2007, the company sold approximately 1.9 billion unit cases, generating net sales revenue of 6.2 billion ($9.0 billion).