stockguru

Analyzing Micron's Downside

someone on yahoo by name of gungbao2003

It has been claimed and I quote from Bill Alpert's Barrons' Article:
"What dismayed investors were September-quarter gross margins of 30.8% -- down from 35% in June and 39% in 2006. Piper Jaffray's Jesse Pichel noted that LDK gross margins were still an inexplicable 10 percentage points above those of peer ReneSola (SOLA). LDK inventory is turning just 2.2 times a year. Pichel downgraded the shares to a Sell with a price target of 34.50."

In summary the answers to why RENESOLA's margins are 10% points lower than LDK are found in RENESOLA's press releases and financial statements. The difference is in the technology. Majority of RENESOLA's solar wafers produced up to 3rd Qtr of 2007 are monocrystalline wafers while LDK's are MULTIcrystalline wafers. Why would this difference account for LDK's margin's being better?

First, RENESOLA in their IPO papers stated and I quote from
buchanan.uk.com/cgi-bi......
"In early 2007, the Directors intend to commence the installation of 15 multicrystalline furnaces, which each have a capacity in excess of 2,400 kg per month. Multicrystalline furnaces are more energy efficient than monocrystalline furnaces and require a lower grade of polysilicon which would improve the yield from ReneSola's raw materials."

What happened since then? Did RENESOLA achieve full capacity production yet on cheaper and more efficient Multi-crystalline solar wafer production? The answers are in RENESOLA's 3rd quarter ER. renesola.com/investorR......

"ReneSola commenced the installation of multicrystalline furnaces in September following the delivery of the coated crucibles. 15 multicrystalline furnaces, with a combined manufacturing capacity of 75 MW, have now been delivered and installed and are in initial production. The remaining 17 furnaces will be delivered and installed, as planned, by the end of 2007."

If you use your brains, then you would see that majority of RENESOLA's products were still made using the less efficient mono-crystalline methods and they are just going on-stream with Multi-crystalline production in 4th Qtr of 2007. RENESOLA is just playing catch up to LDK and are aware their margins are lower hence their decision to switch to the more efficient production of multicrystalline wafers.

Analyzing Micron's Downside

Eric ,
Have you worked for a hedge fund too in the past like your friend bill alpert???
please check the bio of bill alpert!!
informedinvestors.com/...
he worked for a hedge fund in past!!!
Mr. Alpert began his journalism career as a general assignment reporter for the Hudson Dispatch in Union City, N.J., where he worked from 1981 to 1982. He first joined Barron's as a staff writer in 1984. He resigned in September 1988 to become a stock analyst at a research-oriented hedge fund. He rejoined Barron's in 1996

Analyzing Micron's Downside

Eric ,
Can you please pass on my letter to your friend at barrons!! Mr Bill Alpert!!!
Dear Bill,

I was astonished to see how biased and full of dirt you could be in your latest article on LDK. I think you do not read any other news than barrons since you do not know the difference between self acquittal and audit by Big Four firms. Is this attack to justify your opinion on LDK in october which was proved to be wrong recently? I believe that as an editor at once reputed Barrons you should keep your biased opinions to yourself and rather write some unbiased articles showing us facts rather than using your imagination and being paranoid. If you want to post your personal opinions, you can start a personal blog against LDK. I even have a title for you in my mind "How LDK pissed me off by being Right". You seem to blindly believe in Situ rather than a reputed firm. Can you please enlighten LDK investors by giving a solid reason for that rather than basing your articles on some vague sources. I must also warn you that you might be testing the patience of investors who are being hurt by your sensational one sided journalism. If you do not stick to facts and reality you might be required to divulge your sources in the court of law in the very near future.

thanks