Wally West

LDK Solar: The Brightest Opportunity?

dedacive: Its based on averages from research reports by the analysts based on projected prices for PolySilicon.

The problem is that it is nearly impossible to be very accurate on predicting the price of a commodity for 10 years into the future (how long some of the contracts are). So therefore it is nearly impossible to say if it is close to $9B or $20B. Based on the principle of conservatism, I used $9B which is a very reasonable estimate. I think $20B is a little extreme and is based on the price of Poly at current prices, which are most likely a lot more than what they will be in the future due to the current shortage. Its impossible to say who is correct though.

LDK Solar: The Brightest Opportunity?

Hey ART005, the thing is that the biggest cost of PV was the polysilicon for the wafers. This problem is being solved as we speak. Imagine the oil boom from history, Imagine if all of the oil in the world was available but nobody had the technology or the capability to drill for/refine the oil. Oil was plentiful but extracting/refining it for use was the obstacle. Whoever were among the first to successfully achieve this feat, would be handsomely rewarded. Thats the similar case for the solar industry.

Polysilicon shouldn't be the most expensive component of a solar panel. Its 40-45% of the cost of good per solar cell. Its quite ironic because silicon is the 2nd most abundant element in the earth. Its practically just sand. The problem was that there were no facilities/needs of refining this silicon into PolySilicon on large scale because there wasnt a great enough demand. Now that energy prices are at record prices, many people are turning to the future of solar. The demand is being established as energy prices rise, and polysilicon prices (and in effect, solar panels) drop. Theres PLENTY of silicon in this world, we just need to be able to refine it on a large scale. This is already happening (i.e. LDK's polysilicon plant). Its essentially dropping the cost of the most expensive component of a solar cell.

Those pioneers into the PV industry that are helping drop the price of silicon to affordable levels will help lead the transition to a less fossil fuel dependent world. I personally believe there will also be a handsome profit and future for them in the future as well.

LDK Solar: The Brightest Opportunity?

I know a lot of people said I missed some points but I did consider the point that you guys have mentioned. However, for the sake of brevity, I chose to pick out the point I thought we're most significant. For example, shrinking margins due to high Poly prices are just temporary. I like how analysts point out that high poly prices are bad for LDK when in reality, LDK will benefit from high poly prices because they will change from a buyer to a producer. It would simply be too long of an article if I were to include every aspect of this company that I have studied.

Also, in the press release from last week. Mechanical completion of the plant is done or nearly finished. Since they expect to be commissioning the plant for production over the next 3 months, my guess is that any mechanical completion left is insignificant. and yes, we are now in the third quarter as of July 1st. LDK will be reporting Q2 results near the end of this month.

Any criticism is welcomed. Criticism is the key to debate and sharing of ideas (knowledge). Im open to all opinions.

I'd like to thank you guys for reading my article. I hope it is a major milestone to my future career as a young financial analyst. Please let me know what you guys think. I appreciate your time.

LDK Solar: The Brightest Opportunity?

I know a lot of people said I missed some points but I did consider the point that you guys have mentioned. However, for the sake of brevity, I chose to pick out the point I thought we're most significant. For example, shrinking margins due to high Poly prices are just temporary. I like how analysts point out that high poly prices are bad for LDK when in reality, LDK will benefit from high poly prices because they will change from a buyer to a producer. It would simply be too long of an article if I were to include every aspect of this company that I have studied.

Also, in the press release from last week. Mechanical completion of the plant is done or nearly finished. Since they expect to be commissioning the plant for production over the next 3 months, my guess is that any mechanical completion left is insignificant. and yes, we are now in the third quarter as of July 1st. LDK will be reporting Q2 results near the end of this month.

Any criticism is welcomed. Criticism is the key to debate and sharing of ideas (knowledge). Im open to all opinions.

I'd like to thank you guys for reading my article. I hope it is a major milestone to my future career as a young financial analyst. Please let me know what you guys think. I appreciate your time.