zawy

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    • Wed Mar 12th 10:45 AM | Rating: 0 0
      Commented on:
      Canadian Solar: Value Diamond in the Alt. Energy Rough
      Jack's comment about the storm probably resulted from CSIQ mentioning that the storm had no effect of 4Q results.

      The "value" of a company is pretty much DEFINED by Jack's method. All the things David White and User mention are already INCLUDED in Jack's methods, except for price wars, which Jack counters with the drop in silicon price argument. I would like to know how much their costs decrease with a 30% decrease in silicon. CSIQ is trying to produce as much as possible while acheiving an acceptable profit margin that keeps investors happy. This emphasis on production over short-term profit is why their yoy growth in watts produced exceeds 2nd-place winner FSLR. Their primary goal seems to be to supply the world with massive amounts of good solar. I like that, especially for an industry that has no proprietary advantage. The CEO is basically a PhD solar techie, plenty wise in the financial things, and not playing games with anyone, let alone the market. They want to be the Chiquita of bananas. FSLR does too, but FSLR is less likely to install residential, basically killing 30% of their watts produced. FSLR also has little desire to vertically integrate, where CSIQ could make all its profit if it decides to squeeze out new players by reducing cell price to zero margin.

      CSIQ does not have the contracts to support $1 billion this year.
      View article »
    • Wed Mar 5th 12:54 PM | Rating: 0 0
      Commented on:
      Contradictions in the Solar Market
      I agree that the seeking alpha article that discussed oversupply is probably wrong. The reported demand appears to be a gross underestimate of actual demand. The solar companies themselves know better than financial institutions what their customers are scrambling for. There's no incentive for buyers to tell outsiders what their needs are. They just need to tell the solar manufacturers, who are reporting a very bullish outlook.

      For the 1st contradiction, who's forecasting the 54% utilization? Certainly not any individual solar manufacturer. So i would question your industry-wide numbers It's also important to compare last quarter's capacity with next quarter's production. Not this year's year-end capacity with this year's production.

      In the 2nd contradiction, the thin film expansion in light of poly oversupply, you're going backwards towards the same data used in contradiction number 1. It's not a different contradiction if the problem is simply an underestimate current demand. The 30% lower cost/watt of installed thin film explains the increasing market share.

      The 3rd contradiction is still not a different contradiction. Over supply of poly is inherent to the argument of contradiction number 2 and still explain by an underestimate of coming production and demand.

      For the 4th item, thin film (FSLR) has 2 times the profit margin and their costs will be cut in half in the next 5 years. Lower mono and poly prices will still not enable poly and mono manufacturers to keep up. That is not to say I'd buy FSLR at this PE. In fact, I sold FSLR and bought CSIQ right after FSLR jumped, but also right before CSIQ fell. Thankfully it's coming back today.
      View article »
    • Fri Feb 8th 12:06 PM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      In 2009, the indium report says there will be a shortage of 43 tonnes assuming 64 tonnes increase in non-ITO uses over 2007. The report does not give an estimate on future solar needs. 3 GW in 2011 will require 100 tonnes more than what they seem to predict, so it's 143 tonnes short (demand exceeding supply by 10%) in 2011 if the shortage remains about the same and if they are not sufficiently bullish on CIGS needs. Their charts do not go out to 2010 which is where I'm saying the problem could begin. Judging from their comments and graph, a 1% shortage caused a quadrupling of price. Their comparison to silver is absurd. The concentration that is in the Earth's crust is not related to minability. This type of reasoning is often use to make a false argument in metal discussions. The theoretically minable silver is 100 times more than the theoretically minable indium. The report shows that almost all increase in "production" is actually from LCD reclamation. There's only a 10% increase in virgin production from 2007 to 2009. The doubling of reclamation does not add up very well with the comment that reclamation is already at 60-65% of the 70% in LCD "targets" (waste). 100% reclamation only increases 35-40% of the 70% which is about 23% overall increase in reclamation instead of 100%. It's not a small discrepency since reclamation increase shown in their table is 90-95% of the total increase in supply. The difference is another difference of 25% between supply and demand. Although the table shows a great increase in reclamation, it does not show what happens when there is no more available efficiency increase in reclamation. That is, their table interestingly stops before the "end of the line" for significant indium reclamation increase...NEXT YEAR. The only valid point they make is that smelters can now afford to transport waste slag etc further from small producers. Most large producers already have it on site.
      View article »
    • Thu Feb 7th 23:26 PM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      Purified indium already costs something like $2,000 per kg.

      Although i agree with all your facts, i don't think they detract very much from my concerns. A likely scenario is that production goes up a little (eventhough it went down in 2007), LCD manufacturers find "good-enough"... alternatives, and everybody pays a bit more. But in only 3 years there has to be massive changes in the indium world before CIGS can continue to grow.

      I would be interested to know where sharp plans to get 50 tonnes of indium for 1 GW. That's 10% of the world supply. The LCD world in 2 yeyears will not allow that much to be sold for non-ITO uses. They'll need about one gram for a $800 TV? Whereas $800 of CIGS cells will need 5 to 20 grams. Solar cells might be important, but on a square foot basis, people think a big TV is more important, and will pay accordingly.
      View article »
    • Thu Feb 7th 15:09 PM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      Jack, neither of my post were meant to promote or detract any stock. It's more like my doodling and musing over your article and wondering if FSLR needs to be so low and if CSIQ needs to be so high. I have 1.5% of my net worth in FSLR and 5% in solar. I recently divested myself from 10% net worth in oil and gold. Thanks to your article motivating me to look into CSIQ, i am considering switching to CSIQ. The CEO feb 2007 speech on the web site makes me like management as well as can be. Engineering, motivation, ethics, and long-term plan seem to be all in place as solid as a rock. Only new technology and disinterest in green can displace them.

      ITO is using 84% of the world production. Poduction is 510 tonnes/year, leaving 80 tonnes for non-ITO. Being very generous to CIGS, ITO indium recovery could improve to keep up with bigger TVs eventhough demand from that sector is increasing 50% per year. There's already a shortage. Solar cells can't outbid big TVs, but can pay more for non-ITO indium. 80 tonnes means only 2 GW indium per year can be produced, enough for $2B in profits in 2010 for all CIGS companies. But the indium stops there. Recovery can improve only about 30% and CIGS at 1.5 um can theoretically get down to 20 tonnes per GW, so the indium might last until 2012 to make 8GW and $8B for the sector before hitting the indium wall. Indium is 100 ppm in zinc and you can't get it anywhere else. Indium accounts for 5% of a zinc producer's gross and maybe 15% of its profit. So if the price goes up another factor of 10 (which is supportable by both CIGS and ITO ...$0.10 per watt just for the indium), I guess you could flood the market with zinc just get to the indium and extend it even further. The theoretical max reserve base of indium with 100% recovery is 16,000 tonnes, theoretically enough for 1 TW, or $1 trillion in nansolar profits. But 5% of that disappeared into LCDs last year, given the so-so recovery. In 2010, 10% of the reserve base could go into LCDs, someday coming out for recycling.

      Take your pick:

      1) LCDs have to stop using so much, or
      2) zinc plummets on indium going up a factor of 10, or
      3) CIGS is idled by 2012 if not 2010.
      View article »
    • Thu Feb 7th 10:15 AM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      OK, to correct some bad english: if supplies are going to be three higher than demand this year thanks to all these solar cell companies ramping up production, FSLR is in a good position (ignoring current high price) because it has the cheapest cells and largest profit margin. It sales could stay high, profit stay the same, while the sales and profit of everyone else plummets turns into massive quarterly losses. The 5% margin of CSIQ isn't reassuring in this scenario. We depend heavily on CSIQ's guidance on what they think they can sale and at what price, if we are to ignore the seeking alpha article that discusses too much supply in 2008.
      View article »
    • Thu Feb 7th 09:44 AM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      The best-fit curve for FSLR growth for the past 5 years is 167% yoy. Multiply 2.67 times 2002 production and keep doing that until you reach 2007 and even into 2009 guidance, and it comes out right. 167% yoy. I did an article on it for seeking alpha. CSIQ has yoy revenue growth of 189%, best fit curve 2003 to 2008, and 220% for 2006 to 2008. But looking at their fact sheet, their gross profit from revenue has gone from 40% to 17% to 5% in the past 3 years. They hope for it to return to 14%. FSLR guidance is that their profit per revenue will stay close to 50% thanks to no competition with others who make this type of cell. CSIQ has revenue of $3.8 per total watt and FSLR has $2.40. Let's be optimistic and say CSIQ is returning to 14% profit per revenue, or $0.53 profit per watt verses FSLR's $1.3 profit per watt. So CSIQ has to produce and/or install and/or assemble 2.5 times more to match FSLR in profit. If CSIQ stays at 5% profit, it has to produce 7 times more. So it's not fair to compare just watt production.

      If world demand is really three times lower than this year's production (according to another seeking alpha article). In excess supply, only the cheapest cells will be sold, killing everyone's profit except for the one (or two) company's that already have the cheapest cell. They will be able to retain their profit margin better. So it's not risk-free to invest in this Chinese company that has a Canadian name.

      On the big plus side for CSIQ, if it acheives the 14% margin and equals FSLR watt production very soon as expected, then having a market capitalization 26 times less with profit/watt only 2.5 times less means it would have to be 26/2.5 = about 10 times higher to match the price of FSLR. At only 5% margin, it still has increase a factor of 3 to match FSLR price.

      I can't believe anyone's still discussing CIGS when there's not enough indium in the world's minable crust to meet LCD needs in the next 5 years, let alone solar cells. I thought that pig was porked already.
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    • Wed Feb 6th 14:07 PM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      Here's the fast money link:
      www.cnbc.com/id/227348.../

      She says she's talked about negatively repeatedly. Things like odd measuring sticks, nondisclosure, and the CEO owning half the stock.

      I really wish seeking alpha would fix the awful programming: they have independent URLs or something for each image and they're loading seperately, even though it's the same image. Their pages, especially if there are any comments with the 3 little images next to the name, time, and date, cause really spooky things. One article had to load 300 freaking images, in addition to all the fetch and reply requests needed for each one, simply because people posted a lot of replies....but there are only needed to be 30 or so independent images with only one fetch and reply each to do the same thing. They must have paid a lot of money for someone to do such a bad job. Normal programmers can't do this bad if they tried.
      View article »
    • Wed Feb 6th 13:48 PM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      SOLF was cited by the non-male on Fast Money to be the worst stock to put your money in. This Chinese company had a mysterious fantastic increase in profit and they will not disclose how much they are selling their cells for. She seemed to be saying it's a very questionable company. My impression is that no one knows what their profit or sales are.
      View article »
    • Wed Feb 6th 10:40 AM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      Sorry, I was posting from memory and there's a missing divide by 4 in my post. PE in 2009 is 68 based on 5-year historical growth which is very close to guidance. PE less than 10 time frame is in 2012 assuming dollar does not increase against the Euro by more than 50%. Current yoy growth is 167%, not 180%.
      View article »
    • Wed Feb 6th 10:25 AM | Rating: 0 0
      Commented on:
      Why Canadian Solar is the Best Solar Stock
      The core technology at the 5-year level for FSLR is the best of all these. They will keep a $1/Wp profit for 3 to 5 years while their price to utilities reduces to nearly 1/2 current price which is already 1/2 the price per Wp of the others you have listed. The 5-year year yoy growth of FSLR is 167% per year and and 180% per year for the past 2 years. Their "scheduled production" (underestimate) is 1 Billion watts to utilities in 2010. $1.5 B Wp sold in 2010 is reasonable. At a current market cap of $15 B (error in your sheet), that's a PE of 10. By listing FSLR last, it shows your methodolgy is pretty blind, as you explained at the top.
      View article »
    • Tue Dec 4th 06:02 AM | Rating: 0 0
      Commented on:
      First Solar Needs to Hoard Tellurium to Sustain its Current Growth
      It's funny, but i guess the 3 of us are a good mix for seeking alpha:

      Mark's bull on Te, bear on FSLR
      Andrew's even on Te, bull on FSLR
      I'm bull on both.
      View article »
    • Tue Dec 4th 05:54 AM | Rating: 0 0
      Commented on:
      First Solar Needs to Hoard Tellurium to Sustain its Current Growth
      Andrew, email me at zawy at yahoo. I have data you need to see. Good point about equipment suppliers. But I stumbled on one of their suppliers and have the feeling they will be able to sell all FSLR wants. Just as Mark and I are trying to make sure they'll have enough Te (at least indirectly), i think equipment suppliers can see FSLR's future needs netter than FSLR. Their life's blood is knowing what customers' (like FSLR) future equipment needs are. They have 10 times more motivation in looking ahead than FSLR. For example, if Mark and I make 10 times on Te, FSLR only loses 10% of it's profit. So Mark and I need to know the future of Te better than FSLR. I previously calculated on 90% year-over-year. The curve-fitted trend shows 167% YOY. The 152% is based strictly on the beginning point and ending point which turns out conservative because the beginning 1.5MW was a little higher than the curve-fitted trend and the ending 380 MW is a little lower.

      Mark, i think you primarily mean hoarding would raise their own costs (they would be their own competitor in its demand). Interesting. Which logically leads to the idea that they would need to downplay their future needs so that there's not a run on it. Interesting. It's a shame if they go from 3 micron to 1 micron and one day they look back and say "Sure wish we had all that Te sitting in our old modules."

      I didn't choose the title. FSLR hoarding was the least thing on my mind. CdTe thickness and copper recovery rate are more important.

      In march 2005 they predicted they would make 75 MW in 2007. It's going to be 200 MW. That's why I backed off the previous 90% YOY. That 90% was partially supported by the "announced" 900 MW/yr capacity at end of 2009 which is based on 2007 efficiencies. The webcast indicates greatest efficiency improvements in the next 2 years. So in addition to Andrew's article about the dollar value, they appear to be underestimating 2009 end of yr capacity AND there's a lot of efficiency improvements that will reduce their costs faster than the 6.5% APR decrease in contract revenue, so that the peak for the stock could come in 2009 before Te problems are apparent.
      View article »
    • Sun Dec 2nd 09:28 AM | Rating: 0 0
      Commented on:
      Reality Check: First Solar and Tellurium
      If you'll notice, "Scott Roberts" is predicting FSLR could have enough Te for a PE of 5 in 2013 and that there is no Te shortage for at least 3 years. "Mark Anthony" would never say such things. Andrew Ling has just lied twice when he says Mark and Scott post the same "false facts". Their numbers are different by nearly 100%, and both have provided references to back their numbers up. Mark relies on USGS and NREL data whereas Scott uses peer-reviewed data. If Andrew Ling cannot respond to this post with facts to contradict Mark or Scott, then we can accept Andrew Ling as a known lier and/or clueless. However, I'll agree that Mark uses multpile identites and responds to his own posts in order to bash FSLR.
      View article »
    • Fri Nov 30th 13:42 PM | Rating: 0 0
      Commented on:
      Reality Check: First Solar and Tellurium
      Correction to "Newer research" link that has the most-accurate information on Te availability:

      doi.wiley.com/10.1002/...

      The full article costs $25.
      View article »
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