Trina Solar Announces Largest U.S. Rooftop Project, 2009 Updates

The first news item is for show, the second news item is for dough - Trina Solar (TSL) has been the worst stock we've held (biggest loss) but I have not sold it off, unlike most of our losers, because I am convinced that, at some point, investors will realize the tremendous earnings power in the model in the coming 2 years. I've just been wrong for a year now waiting for that time (much of which we can thank management and their "surprises" for). Sadly, the stock still trades at under 10x 2008 earnings for >100%+ growth.

From the press release:

"Trina Solar to Power North America's Largest Single Rooftop Installation":

• Trina Solar today announced that shipments began this month to provide more than 13,400 solar PV modules to power the Atlantic City Convention Center ("ACCC"). This supply comes as part of a signed agreement with general contractor American Capital Energy, who is managing project integration and installation for Pepco Energy Services and the Atlantic City Convention & Visitors Authority ("ACCVA"). The agreement provides for up to four additional megawatts ("MW") to be supplied during 2009.
• Once complete, the ACCC project will be North America's largest single roof-mounted solar array, with approximately 185,000 square feet of solar panels for a system size of approximately 2.4 MW. The system is expected to generate over 2.8 million kilowatt-hours of energy per year, or enough to power 280 US homes. The system is being developed under a 20-year Power Purchase Agreement with Pepco Energy Services, a subsidiary of Pepco Holdings, Inc., and will provide the ACCC with energy savings of $4.4 million over 20 years.

More important to me (from Reuters) ...

Trina sees 5-6% drop in 2009 average selling price but "as much as" a 20% drop in polysilicon cost (i.e. margin expansion in 2009) (emphasis mine):

• Trina Solar Ltd (TSL) expects its silicon costs to drop by as much as 20 percent in 2009, while the average selling price of its solar modules will fall by a more modest 5 to 6 percent, an executive said on Wednesday
• That decline in silicon costs versus the more modest selling price decline would lead to a "a significant margin expansion," Arturo Herrero, Trina's vice president of sales and marketing, told Reuters in an interview.
• Trina, which earlier on Wednesday announced the largest single rooftop solar project in the United States, expects 30 percent of its sales would be to Germany, compared with about 35 percent in 2008, Herrera said.

Also the US extended renewable energy tax credits late yesterday, which is good for the US of A, but in the near term does not mean that much for most solar companies, as very little of their business is in the US (we are too busy "drilling baby drilling"). But since US investors think the world revolves around them, it is helping sentiment this morning. Unless the market backdrop improves, I expect this "glee" to be short-lived.

• Solar power companies' shares rallied in early trading on Wednesday, the day after the U.S. Senate voted to extend tax credits worth $18 billion for renewable energy sources. The measure, which the House of Representatives and President George W. Bush are expected to approve, would give businesses a 30 percent tax credit to offset the development costs of solar and other clean energy projects.
• Industry experts had warned that failure to extend the tax credits, which were to expire at the end of 2008, would hamper the growth of solar power, which remains more expensive than conventional electricity sources, such as coal and natural gas.
• "We see this as an important catalyst for the entire solar and renewable energy sector, especially for solar names with residential exposure such as (SunPower)," analysts at Piper Jaffray wrote in a note to investors.

Disclosure: Long Trina Solar in fund and personal account

Comments

[Wojna12:]

theres no new info here at all. then u proceed to throw in a chart with ema's that has nothing to do with the article. go try and pump up some other stock.

EPIC FAIL

2008 Sep 24 01:23 PM

[Wojna12:]

One more to add.

I live how you saw 'we' as if you run a fund. I'll interpret that as you and yours wifes college fund for your kids. Which btw they are not going to college as you have been wrong for a WHOLE YEAR. Thats a long time to be wrong.

2008 Sep 24 02:13 PM

[dicki31785:]

What insightful input Wojna12....just one question, if Trader Mark is writing rubbish how would your analyze your input?....Thanks for wasting 30 seconds of my life by reading your comments...with kind regards from Germany CW

PS Trader Mark with the current net profit margin, which is likely to expand, Trina is bound to make about 142 millions in 2009...surely have seen worse valuations;):)

Long ABX, AUY, CSIQ, ESLR, TSL, SSL

2008 Sep 24 04:18 PM

[Wojna12:]

Hi dick31785.

Let me say Ive actually fully analyzed the company. Let me further say that very recently I am long TSL. However i waited until a fair valuation occured before I bought in.

Btw this whole blog here is a 'cut n paste' of 2 news articles. Although I just absolutely love his little rhyme at the start. Makes me almost forget that the info here is word for word from 2 articles.......Ive learned alot...

2008 Sep 24 04:45 PM

[Bebe Kate:]

Actually Wojna12 I have my childs college fund in Trina also. I have been following Trina for 15 months now and I believe the long position held here...Oh yeah...I work for a major Canada bank in the securities department...We don't screw around!

2008 Sep 24 04:50 PM

[dicki31785:]

I have read all the news in the article before as well Wojna12....so no new news to me either... but I am pretty sure some people are finding this helpful as well...and obviously it is more or less copy and paste but he referenced the article as well, so he wasn't going for something special here(I suppose)....I think he just wanted to give people a clear look on what is going on right now with the stock...and give all the latest news about Trina which he managed more or less IMO...Their is so much turmoil in the markets it took two days for the US to even register Trina's guidance for 2009....

IMO Their is no reason to take attack the guy...if you can do it better open up a blog(or whatever) and write about it...what do you get out of attacking the guy...sorta childish...isn't it?Could have been a nice discussion concerning TSL but instead we are commenting on your rubbish...Another option would have been to give feedback on your analysis that I suppose you did thoroughly...would have been a lot more constructive...but the window of opportunity is still open:)

In any case Trina is a good investment for the long-term(which in this market is about 3-6 months if the market doesnt get crushed otherwise average down the valuations are absurd)...demand for next year will be about 7GW, if y'all would like I can give you an expected breakdown(in MW...I recently updated the demand side and can give you the supply side as well though I did not research the supply side myself but somebody gave it to me and the numbers checked out) market by market, meaning the oversupply will not happen in 2009 as predicted....in 2010 this might be another story but with solar and the rapid advancements that are actually made, more or less, every day in the supply chain anything can happen....With kind regards from Germany CW

2008 Sep 24 08:01 PM