UPDATE 2-China Sunergy posts surprise Q1 profit

(Recasts; adds details, share movement, background, analyst comments, conference call details)

By Shradhha Sharma

BANGALORE, May 20 (Reuters) - Solar cell maker China Sunergy Co Ltd (CSUN.O: Quote, Profile, Research, Stock Buzz) posted a surprise first-quarter profit, boosted by strong sales of its high-efficiency cells and higher prices.

China Sunergy is contemplating going to the market in the second quarter to raise cash for its capital expenditure needs, a company executive said in a conference call with analysts.

"Liquidity looks better, but CSUN may still seek capital to fund long-term polysilicon supply contracts," Robert Stone, an analyst with Cowen and Co, said.

In a note to clients, Stone said he also raised his 2009 earnings estimate for the company to 60 cents per American Depository Share (ADS) from 50 cents, on lower projected debt.

China Sunergy has about $100 million cash on hand and sees capital expenditures of about $60 million for the year, of which about $20 million has already been funded, Jefferies & Co analyst Paul Clegg said. The company said it plans to fund the remaining $40 million through cash raised from the market.

The company's shares, which fell as much as 10 percent earlier, pared losses to trade down 7 cents at $12.99 in afternoon trade on Nasdaq.

"It could have been someone who bought the stock a week ago and decided that since they (China Sunergy) weren't raising full-year guidance, it was time to take profits," Stone said, referring to the decline in share price earlier in the day.