As part of its tier-one versus tier-two players thesis, Goldman also judges Solarfun Power ( SOLF) to be a tier-two Chinese module maker set for a more difficult set of circumstances in 2011. Goldman initiated on Solarfun at a hold. The difference between a sell on Jinko and a neutral rating on Solarfun was explained by Goldman in its outlook this way: "We believe Solarfun's tier-two branded and OEM business model might bring more ASP pressure or channel conflict in an over capacity environment. However, due to the continuing vertical integration; SOLF should be able to structurally reduce its cost structure and maintain its gross margin going forward." Jinko Solar, which went public earlier this year and saw its shares almost quadruple in value from the IPO price of $11, was declining between 5% and 7 % on Tuesday, on above average trading volume. Jinko has hit all high marks in its first year as a public company, with volume growth, key customer wins, strong average sales prices and a good cost structure. However, Goldman sees these short-term strengths all being subject to pressure in 2011. Jinko Solar shares had reached a 3-month low of $22 last week, after a meteoric rise to near the $40 mark over the past-three months. Jinko Solar shares were still above the $22 mark after the decline in Tuesday morning, and its recent dive was in line with the widespread selloff in solar as the euro fell. Goldman thinks that Jinko Solar gross margin peaked in the third quarter, and will decline further versus its peers during a downcycle in 2011.